The SMSF Association has strongly supported the official creation of the Australian Financial Complaints Authority (AFCA), labelling it a significant step in protecting the rights of all SMSF members.
The passage of the legislation establishing the streamlined dispute resolution body was announced earlier this week by Revenue and Financial Services Minister Kelly O’Dwyer and Small and Family Business Minister Craig Laundy.
AFCA has amalgamated the functions of the Financial Ombudsman Service, Credit and Insurance Ombudsman, and Superannuation Complaints Tribunal, simplifying the existing avenues of redress for financial services consumers.
SMSF Association chief executive John Maroney said AFCA will give SMSFs access to a dispute-settling mechanism that will enhance their ability to deal with large institutions.
“This is an important reform for the SMSF sector,” Maroney said.
“Giving SMSF members the ability to be able to have their grievances with a large institution dealt with by AFCA and avoid lengthy and costly legal proceedings is to be commended.
“Anecdotal evidence suggests that SMSF members often do not pursue their complaints with banks, insurers and super funds because of the potential legal costs and complexity.”
But the establishment of the authority as a one-stop shop now provides an avenue to address their complaints in a way that is binding and without the cost and trauma that can occur in the court system, he added.
The government has increased access to redress by allowing any business with fewer than 100 staff access to AFCA, as well as lifting the caps on income stream insurance product disputes and uninsured third-party motor vehicle claims.
AFCA was introduced as part of the comprehensive package of new super legislation introduced to Parliament on 14 September 2017.