More than a third of superannuation funds have failed to sign on to the new government complaints body, the corporate watchdog said this week.
The Australian Securities and Investments Commission (ASIC) has approved rules and terms of reference for the Australian Financial Complaints Authority (AFCA).
The new body will merge the functions of the Superannuation Complaints Tribunal, the Financial Ombudsman Scheme (FOS) and the Credit and Investments Ombudsman (CIO).
Until 31 October 2018, super fund complaints will be heard by the SCT. Complaints already lodged with the SCT will not be transferred to AFCA. Similarly, any complaints withdrawn from the SCT will not be allowed to be relodged with the new authority.
Fund members’ complaints will only be heard by AFCA from 1 November 2018, however, just 64 per cent of funds have registered with the new tribunal.
Funds that are not compliant with AFCA have just one week to sign up. ASIC said it was a statutory requirement that financial firms which deal with retail clients must join the scheme by 21 September 2018.
“AFCA will be able to deal with complaints about financial firms including banks, credit providers, insurance companies and brokers, financial advisers, managed investment schemes and superannuation trustees,” ASIC said in a May statement.
The green light for the tribunal comes in the wake of the banking royal commission having heard evidence of bank-owned and retail funds illegally charging fees for no service.
Former Howard minister Helen Coonan, who chairs AFCA, said the new tribunal “will provide consumers and small business with access to fair, free and independent complaint resolution”.
“We look forward to working with ASIC, and consumer, small business and industry stakeholders in implementing this important reform, which will assist in restoring trust and confidence in the financial services industry,” she said.
Also this week, law firm Slater and Gordon announced it would launch a class action against some bank-owned super funds to recover around $1 billion in fees wrongly charged to members.
Estimates suggest there are millions of Australians who might be eligible to take part in the lawsuit.
ASIC said that almost all FOS members had transferred their membership to AFCA, as had 80 per cent of members of the CIO. But just 64 per cent of superannuation trustees and retirement savings accounts providers had, so far, joined up.
Would you be concerned if your superannuation fund had not signed up to the new complaints tribunal yet, in light of the banking royal commission evidence.