If you’ve had to make a complaint to a financial institution, it likely means you’ve suffered some kind of financial stress. So you’d obviously want the complaint to be handled quickly and efficiently.
Yet that hasn’t been the case for many. The Australian Securities and Investments Commission (ASIC) has set its sights on a complaints process it says has a number of holes and on super funds that aren’t meeting existing obligations.
In some cases, ASIC says, the funds’ handling of complaints has been to do nothing at all – not even respond to the complainant.
ASIC’s Regulatory Guide 271 Internal dispute resolution (RG 271) mandates a maximum period of 45 days to respond to a complaint. However, ASIC found that almost 20 per cent of super funds failed to comply with this seemingly very generous time frame. In half of those cases, the funds did not even provide a reason to their complaining members.
While ASIC noted that 10 per cent of the funds it examined recorded fewer than 10 complaints for every 10,000 members, those numbers may look better than they should. ASIC identified two possible reasons for this. Super trustees may be failing to actually record complaints, or they could be using a definition of ‘complaint’ that is so narrow as to exclude the majority of cases.
These shortcomings have attracted the attention of finance minister Stephen Jones, who took aim at repeat offenders in an address last December. “The customer experience needs to improve across the board … the sector is on notice,” he said. “I want to stress the importance of the member experience to the overall sustainability of superannuation as an institution.”
An interesting aspect of the Australian Financial Complaints Authority (AFCA) 2021–22 Superannuation Complaint report is the huge spike in complaints not resolved within a year. The 2021–22 release was the fourth edition of the annual report and in the first of them (2018–19) the number of report cases not resolved within 365 days was zero.
That rose to 97 in 2019–20, and then to 268 the following year. This year, the figure was up to 426 – a 59 per cent increase.
One can’t help but wonder if such a big jump might have been prevented if trustees met the first part of their obligations – responding to complainants within 45 days.
Xavier O’Halloran, director of Super Consumers Australia, says it’s time funds got their act together. “It’s clear from ASIC’s review that many super funds are not putting members first,” he said.
“They’ve either not adequately invested or set up their complaints handling processes poorly, which has led to some consumers waiting months to get a complaint resolved.”
Mr O’Halloran’s sentiments were echoed by the finance minister. “Government and the regulators will take steps to lift standards but in a competitive marketplace, funds should be leading the way,” he said.
Have you had cause to make a complaint to your superannuation trustee? What was your experience? Why not share your thoughts in the comments section below?