Australian Financial Complaints Authority (AFCA) cases involving SMSFs rose by 95 per cent, totalling 1323, in 2024/25 and accounted for one-third of incidents involving investments and advice.
“What we’re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-managed super funds that ultimately isn’t in the customer’s best interest,” AFCA chief ombudsman and chief executive David Locke noted.
Complaints alleging failure to act in the client’s best interest rose 124 per cent to 1266.
“This only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice,” Locke added.
AFCA reported 100,745 complaints in 2024/25 for the entire financial services industry. That was a 4 per cent decrease on the previous year, but the second year in a row that complaints exceeded 100,000.
“We’ve now had three years of high complaints … Firms have more work to do to ensure fair responses to complaints are delivered earlier, without people having to take the extra step of coming to us,” Locke suggested.
Overall superannuation complaints (6164) fell by 16 per cent.
The AFCA data showed investments and advice complaints (4193) were up 18 per cent amid a string of failures, including United Global Capital, Shield Master Fund, First Guardian Master Fund and Brite Advisors PL.
Scam-related complaints fell 45 per cent to 5977, but Locke said caution needed to be exercised when interpreting these numbers.
“AFCA currently only sees a small proportion of scam complaints and towards the end of the financial year we saw an uptick in some scam types that cause great harm. The number of scam cases are far too high and behind every case is a consumer who has been traumatised and often suffered life-changing impacts,” he said.
AFCA welcomed an improvement in claim handling by superannuation funds, with issues involving handling delays falling by 39 per cent.
“The reduction in superannuation complaints is a positive sign that improvements are being made, but we’re still concerned that the top three issues relate to service quality and we urge superannuation funds to improve service standards,” Locke stated.
AFCA’s full data involving complaints will be available in its annual review later this year.
