Sceptical ASIC probes ‘nil’ IDR reports

The Australian Securities and Investments Commission (ASIC) has made clear that it has concerns about the under-reporting of complaints and will be checking firms which claim to have received no complaints over the past 12 months.

ASIC used its Report 801 on Internal Dispute Resolution (IDR) to express surprise at “a high number of nil submissions it received and would be checking the veracity of those claims against other data sets including those of the Australian Financial Complaints Authority (APRA).

ASIC’s apparent scepticism of the high number of nil reports came as financial advice companies emerged as having amongst the lowest number of complaints.

ASIC’s attitude was made clear in its media release accompanying Report 801 which noted that 5,035 firms had declared no complaints for the full-year period noting “this number is higher than ASIC expected”.

As well, ASIC Commissioner, Alan Kirkland pointed to the regulator having identified what it believed were “gaps” in the way some firms were reporting complaints.

“The gaps we’ve identified suggest there may be inconsistent IDR reporting practices across the industry,” Kirkland said.

“While there may be reasonable explanations for some of these variances, we encourage firms to carefully review our report and guidance to assist in reporting complete and accurate IDR data.”

“Starting from next year, we’ll be publishing data about complaints received by individual firms. It is crucial that firms act now to address any gaps in IDR reporting processes, because we will publish the data as it is reported to us,” Kirkland said.

Dealing with the investments and advice segment, ASIC’s Report 801 found that most complaints related to shares (52%), followed by investor directed portfolio services (11%) and other managed investments (7%).

Personal advice ranked fifth on the rankings behind, cash management trusts.

The report then broke down the specifics of the personal advice complaints with service-related issues being the most prevalent (965), followed by quality of advice (654), other advice-related issues (593), fees and costs (392) and general service delay (248).