AFCA awards $185m in first year
The Australian Financial Complaints Authority (AFCA) has awarded $185 million in compensation since opening a year ago, signalling there is still a lot to be done by financial firms to improve their practices and restore faith.
Over the year, AFCA said people made 73,272 complaints – an increase of 40% compared to its predecessor schemes which received a combined total of 52,232 during the 2017/18 financial year.
AFCA considers complaints previously handled by the Financial Ombudsman Service, the Credit and Investments Ombudsman or the Superannuation Complaints Tribunal.
AFCA said of the complaints made, 56,420 had been resolved with the majority within 60 days.
AFCA chief executive and chief ombudsman, David Locke, said: “The increase in complaint numbers we are witnessing at AFCA indicates that there is still work to be done by firms to improve their practices and restore public faith in financial firms.
“AFCA will continue to focus on member engagement to help firms to enhance their own internal dispute resolution procedures.”
Locke noted that resolving 70% of the claims within the past year had not been easy.
“Establishing AFCA as a new organisation and handling a 40% increase in complaints was never going to be easy and we are still improving the way we operate,” he said.
“AFCA has also been in a major growth phase of staff to meet demand and has launched the first leg of a national roadshow to promote its service across the country.”
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
