AFCA confirms user-pays funding model
The new Australian Financial Complaints Authority (AFCA) user-pays funding model will be introduced from 1 July after being approved by the AFCA board.
This would see the vast majority of firms pay the same or less in fees while the 10% of ‘heavy impact’ firms would see fees that fairly reflect that fact.
Overall, 95% of licensed financial firm members of the AFCA external dispute resolution scheme would only pay their annual registration fee, which had been set at $375.55 for the coming financial year.
AFCA chief ombudsman and chief executive, David Locke, said: “Members welcomed the fact the model rewards good complaints resolution performance, and that it apportions fees fairly based on use of AFCA’s services.
“The feedback we received was overwhelmingly positive. This is a fair, transparent and equitable funding model. Ultimately, firms have control over the fees they pay by taking a resolution mindset when managing complaints.”
The association’s consultation into the model included 60 meetings with peak bodies and members who were most likely to see an impact, five webinars for all members and 11,000 tailored impact assessments sent to firms.
Feedback from firms saw instalments introduced for member payments above a threshold amount, no fee would be payable for complaints found outside of AFCA’s jurisdiction and the five annual free complaints would be excluded when AFCA calculated the user charge for frequent users of the service. There would also be a single registration fee and simplified complaint fee structure.
The superannuation levy has been abolished and super funds have been brought under the same fee structure as other scheme members.
AUTHOR
Laura Dew
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
