Australian Financial Complaints Authority (AFCA) statistics have shown that since the body’s inception in November last year disputes involving SMSF advice rank second in number with regard to financial advice.
Speaking at a Financial Planning Association Sydney Chapter event last Friday, AFCA ombudsman Shail Singh revealed there have been 201 SMSF-related actions out of a total of 1984 involving the investment category, which incorporates financial advice.
The number one area from which complaints have been received is foreign exchange transaction and equity dealer and market-making activities, Singh said.
“Not surprisingly self-managed super funds is next and often the self-managed super fund [complaint] concerns putting someone into property investments,” he noted.
The AFCA figures showed disputes concerning financial advice accounted for 25 per cent of those in the investment category.
Singh pointed out though, when looking at all of the issues under AFCA’s watch, complaints involving financial advice represented only a very small percentage of the total number of disputes the authority examined.
“So 45 per cent, the vast majority, of our disputes are in fact in credit. [That is] credit cards, maladministration of loans and financial difficulty in making repayments,” he said.
“Twenty-three per cent are in general insurance, so that’s travel insurance, home insurance, car accidents, and deposit taking.
“Superannuation is 9 per cent. So super means death benefit type of disputes, admin on super funds, and group insurance claims.
“Then you’ll see a very small [segment] here which is investments that is 5 per cent by number.”
He noted AFCA received 289 complaints in May and shared his thoughts as to the direction in which the disputes will likely trend in the immediate future.
“I still think [the number of disputes] will be going up as people understand what we do and understand concerns with advice and it gets more publicity,” he said.
“So I still think the trend is up, but we’re hoping it will taper off and then eventually come down, particularly as the FASEA (Financial Adviser Standards and Ethics Authority) standards come into play.”