Advice complaints an AFCA blip but a CSLR burden

Were it not for the collapse of Dixon Advisory and United Global Capital financial advice-related complaints would barely represent a blip among the multitude of complaints handled by the Australian Financial Complaints Authority (AFCA) over the past 12 months.

AFCA has updated its Datacube confirming the impact of Dixon Advisory which in 2023/24 accounted for 1,604 complaints of which 387 were listed as closed, and year later still accounted for 35 complaints.

In the latest update of AFCA data, UGC accounts for 605 complaints after accounting for 545 complaints in the prior 12 month period.

Then follows Sequoia-owned Interprac Financial Planning with 125 complaints.

Importantly, of the 97,822 complaints handled by AFCA during the period, only 4,420 relate to investment and advice, and, of those, the vast majority fall under the sub-heading of superannuation, making up 61.84% of complaints received, followed by derivatives/hedging and securities advice (22.06%) and managed investments (14.2%).

Hardly surprisingly given time-frames, apart from Interpac, complaints relating to the collapse of the Shield and First Guardian funds do not rate a definitive mention in the data.

The updated AFCA data confirm a significant uptick in complaints received the external dispute resolution (EDR) body particularly towards the end of the last financial year, with a particular uptick in June

The data also reflect the scale of the businesses involved, with banks leading the way in terms of complaints lodged with AFCA, followed by general insurers, credit providers, superannuation funds and insurance underwriters.

Separating out specific financial advisor/planner data, the AFCA Datacube reflected the degree to which the Dixon Advisory collapse was continuing to impact complaints data even though it is now an historical incident and the company’s membership of AFCA has been cancelled.

While Dixon accounts for the most complaints dealt with by AFCA, United Global Capital generated the most complaints in the last 12 months at 605, followed by Interprac with 125.