The number of complaints regarding investments and financial advice received by the Australian Financial Complaints Authority (AFCA) increased by 18 per cent in 2024/25, with complaints related to SMSFs nearly doubling.
AFCA’s annual review showed that after falling to 678 in 2023/24, complaints received related to SMSFs jumped to 1322 in 2024/25, which accounted for nearly one-third (32 per cent) of all complaints received by product.
By issue, failure to act in the client’s best interest raised the most grievances, totalling 1266 and representing an increase of 124 per cent from the previous financial year.
“Our complaints data points to systemic issues in advice models, particularly where conflicts of interest and inappropriate use of SMSFs are involved,” AFCA chief ombudsman and chief executive David Locke noted.
The annual review stated: “As with many SMSF complaints, these often involve recommendations to roll over superannuation into a ‘wrap’ platform that concentrates investments into a single fund.”
Objections about superannuation wrap platforms and managed investment schemes also rose and investment and advice complaints relating to super funds increased by 56 per cent.
To this end, AFCA cited the large-scale collapses in the financial advice sector as the main reason for the increase in complaints.
“There is a clear link between a financial firm’s business model and complaint volumes. Recent high‑profile product collapses, which include the Shield Master Fund and the First Guardian Master Fund, continue to drive this trend,” the government body said.
The authority also acknowledged the Compensation Scheme of Last Resort (CSLR), in its first year of operation, accounted for 24 per cent of its investment and advice decisions, a proportion it forecasts to grow as more issues the scheme deals with are resolved. It found in favour of 49 per cent of complainants eligible for the CSLR and awarded compensation of $117 million.
The average time to resolve an investments and advice complaint rose again in the past financial year and is now sitting at 150 days, compared to 129 days in 2023/24 and 106 days in 2022/23.
