SIAA again questions AFCA actions on ‘wholesale’ complaints
The ability of the Australian Financial Complaints Authority (AFCA) to accept complaints from self-managed superannuation funds (SMSFs) that have been classified as wholesale has again come into question.
The Stockbrokers and Investments Advisers Association (SIAA) has raised AFCA’s actions in the context of the broader impacts of the levy arrangements for the Compensation Scheme of Last Resort (CSLR).
As well, the SIAA has raised the issue with Treasury.
Canvassing the issue in its most recent monthly update, the SIAA referenced “AFCA’s recent approach to accepting complaints from SMSFs that have been classified as wholesale if those funds hold less than $10 million in net assets.
It said AFCA’s view is that under the law, if an adviser provides advice to a trustee in relation to an SMSF, it must be treated as a retail client until the SMSF has $10 million or more in assets.
“SIAA has communicated its concerns about the impact of AFCA’s determinations to Treasury, the government and the coalition,” it said. “We have also raised concerns about the potential impact of these decisions on the sustainability of the CSLR.”
“It is unclear how many claims that have been referred to the CSLR are from wholesale clients that AFCA has re-classified from wholesale to retail,” it said.
The SIAA has made clear its concerns about the growing list of managed investment scheme collapses on the cost of funding the CSLR and the manner in which they impact the cost of the 2027 and 2028 financial year levies.
“It will be very difficult to attract new advisers to the industry while ever they are required to contribute to these levies,” it said.
“At the moment the industry is waiting for the results of the Treasury review and the Minister’s decision on what to do with the blow out in the FY 2026 levy.
“SIAA continues to advocate for change to the scheme and will continue to update members on developments.”
AFCA has consistently proven itself to be anti-adviser. Its latest move—arbitrarily reclassifying wholesale SMSF clients as retail against the clear $10 million asset test—is a deliberate bait-and-switch that rewrites the rules after the fact.
This bias directly fuels the unsustainable levies of the Compensation Scheme of Last Resort (CSLR). By letting ineligible complaints proceed, AFCA inflates the very liabilities that advisers are then forced to pay for, creating a vicious cycle that punishes the profession.
This isn’t about fairness; it’s an institutional prejudice that holds advisers to impossible standards while operating with zero accountability. The structure is broken, and the industry cannot survive with AFCA as its judge.
AFCA are a Kangaroo court with no real legal rules, precedents, or common law to be held too.
As for the Wholesale client rules, another Canberra clusterf##k unfolds.
Due to the ambiguity of the Wholesale rules and ASICs so called won’t act under $10mill SMSF assets, we choose to avoid them long ago and stick with the painful retails mass BS over regulation. Seems a wise move now as how many tens of, or hundreds of thousands of clients are now treated as wholesale when Canberra is going to reclassify them Retail now.
The AFSL & Adviser risk exposure for Wholesale businesses just went through the roof.