Financial advice complaints rise, while super complaints drop

Complaints related to superannuation have dropped, but complaints about financial advisers have climbed, according to the latest research.

The Australian Financial Complaints Authority (AFCA) has revealed what (and who) Aussies are complaining about when it comes to their money, the Financial Standard is reporting.

And its those we’re meant to be able to trust the most with our money that have come in for the most criticism.

The AFCA revealed it had received a total of 43,516 complaints between June and December 2022. Complaints about banks were the most common, with 16,654 complaints followed by the insurance industry at 10,639.

But the surprising movement was the drop in superannuation complaints. In the first half of 2022, the AFCA received 4115 complaints related to super, but in the second half of the year that figure dropped by 38 per cent to just 2538.

However, while complaints about super were dropping, dissatisfaction with the nation’s financial advisers grew.

There were 2454 complaints made about advisers, which at first glance may seem like a low number. But the figure represents a 25 per cent increase in complaints, a trend they have been trying to buck ever since the Financial Services Royal Commission found many advisers were not acting impartially and/or with their client’s best interest at heart.

The commission found that customers were being charged excessive fees for financial advice they either didn’t receive, or for ‘substandard’ advice that resulted in clients losing money.

At least super funds are improving, though. Earlier this year, the Australian Securities and Investments Commission (ASIC) read the riot act to the super industry, after it emerged the complaint handling process in most cases was less than satisfactory.

ASIC found that almost 20 per cent of funds failed to respond to customer complaints within the mandatory 45-day response time – an already generous time frame.

It appears the super industry heeded the warning of finance minister Stephen Jones, who said at the time: “the customer experience needs to improve across the board … the sector is on notice.

“I want to stress the importance of the member experience to the overall sustainability of superannuation as an institution.”

Looking at other financial sectors, when it comes to specific financial products, home building insurance had the highest percentage of complaints (18.2 per cent), followed by deposit/withdrawal complaints (17.8 per cent), housing finance (8.8 per cent), consumer loans (8.7 per cent), credit cards (7.6 per cent), super account administration (4.7 per cent) and finally derivatives and securities (3.3 per cent).

Of the total complaints received, just 20,926 were resolved, paying out a total of $106 million in compensation.

Have you made a financial complaint in the past year? What was it about? Let us know in the comments section below.

Also read: Survey reveals Australian attitudes to partner spending habits

Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.
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