ASIC lifts the lid on internal dispute resolution complaints
ASIC has released its first publication of industry-wide data reported under the internal dispute resolution (IDR) data reporting framework.
Under the framework, most licensed financial firms are required to report IDR data to the corporate regulator on a six-monthly basis, and this publication covers 1 July 2023–30 June 2024.
This is the first publication of industry-wide data under the IDR framework.
Starting next year, ASIC is also expected to publish data about complaints received by individual firms.
According to ASIC, financial firms reported 72,238 complaints relating to investments and advice for the 2023–24 financial year.
The top three products for investments and advice complaints were shares (37,475 complaints), investor directed portfolio services (8,254), and other managed investments (4,985).
This is followed by cash management trusts (4,332) and personal advice (3,288).
Over $13 million was provided to investment and advice complainants in total monetary remedy over this period, ASIC said.
Across all categories, over 4.7 million complaints were reported by financial firms and around 623,555 complaints resulted in a monetary remedy, collectively totalling over $375 million.
However, ASIC said it remains concerned with the accuracy of IDR data reported.
“While ASIC does not verify that financial firms’ self-reported data accurately reflects their underlying complaints handling, we found variations in the volume of complaints reported by comparable firms and gaps in the IDR data that indicate the data reported to ASIC may not fully reflect the complaints received by some firms,” it said.
Some 5,035 firms declared no complaints to report for the full-year period, which remained higher than ASIC expected.
“ASIC will assess compliance with the reporting requirements by reviewing firms that make a nil submission against other datasets, including reports of misconduct, reportable situations and data from the Australian Financial Complaints Authority (AFCA),” it said.
ASIC commissioner Alan Kirkland said it is important for firms to foster a positive complaints management culture, including a focus on gathering accurate data.
“The gaps we’ve identified suggest there may be inconsistent IDR reporting practices across the industry,” he 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.”
He noted that ASIC intends to publish data about complaints received by individual firms from next year, adding: “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.”
ASIC is closely examining the standard of IDR reporting and undertaking a range of activities to strengthen compliance with the regime, Kirkland said.
“Where we become aware of problems, we will engage with firms to understand the causes, and whether they stem from deficiencies in the firm’s underlying IDR processes or in IDR data reporting,” he said.
“Our ongoing analysis of the IDR data will also inform our other regulatory activities, so industry can expect to hear more from ASIC on this issue.”
AUTHOR
Rhea Nath
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