The Australian Financial Complaints Authority (AFCA) has received more than 100,000 complaints for the second year running, with the CEO signalling there is more work to be done on improvements.
AFCA recorded 100,745 complaints in the 2024–25 financial year, and while this is a 4 per cent decline from the 104,861 seen the previous year, it also marks back-to-back years of more than 100,000 complaints.
According to preliminary data, as at 30 June, complaints related to investments and advice, general insurance, and life insurance were all up for the financial year, counteracting declines in banking and finance and superannuation.
Complaints specifically about investments and advice rose by 18 per cent, thanks to the failures of United Global Capital, Shield Master Fund, First Guardian and Brite Advisors. As well as this, there was a 95 per cent increase in complaints involving self-managed superannuation funds (SMSFs) which accounted for a third of all investment and advice complaints.
AFCA chief ombudsman and chief executive, David Locke, said: “What we’re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-managed super funds that ultimately isn’t in the customer’s best interest. This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.”
Banking and finance made up the largest portion of complaints totalling 54,581, down 9 per cent from last year, followed by general insurance which accounted for 34,231 complaints over this period, an increase of 17 per cent. On the other hand, complaints about superannuation were down 16 per cent to 6,164.
Complaints alleging failing to act in the client’s best interest also rose a massive 124 per cent over this period to 1,266, while misleading product or service information, delay in insurance claim handling, and service quality were the top three issues reported to AFCA.
Despite the slight decrease in overall complaints from the previous year, Locke said it is still “unacceptably high”.
“We’ve now had three years of high complaints. Firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us,” Locke said.
