propertymentors.com.aua guide with the questions in the margin

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If something went wrong: which body handles what

It depends on what was sold. Advice or a financial product from a licensed firm goes first to that firm’s complaints process and then to AFCA; for a course, seminar or coaching service sold to a consumer, the ACCC points to the state and territory consumer protection agencies; and misconduct can be reported to ASIC, which does not resolve individual disputes.

General information, not legal or financial advice. This page summarises Moneysmart, AFCA, ASIC and the ACCC; each body’s own page, listed under Sources, is the place to check the detail.

Three lanes, by what was sold

Financial advice or a financial product

The firm’s own complaints process, then AFCA

For advice from a licensed adviser, Moneysmart describes a formal complaint to the AFS licensee that authorises them, then the Australian Financial Complaints Authority.

A course, seminar or coaching service

The state or territory consumer protection agency

The ACCC says these agencies can give information about your rights and options, and may be able to help negotiate a resolution with a business.

Misconduct you want a regulator to know about

A report to ASIC, or the police for fraud

The ACCC notes that ASIC does not resolve individual disputes, but can give information about rights and next steps and uses reports in its work.

Moneysmart’s steps when advice goes wrong

Moneysmart says to act quickly if advice does not look right, or if you have paid for services you did not get. Its steps, in its order:

AskWho holds the licence this adviser works under?

  1. Talk to the adviser

    Set out your concerns and ask how they will fix them. If fees are the issue, ask what each one covers, and whether they will lower them if you think they are too high.

  2. Make a formal complaint to the licensee

    If you are not satisfied, complain to the AFS licensee that authorises the adviser; its process is on its website or in its Financial Services Guide. ASIC’s Regulatory Guide 271 sets the timeframes: a financial firm “must provide an IDR response to a complainant no later than 30 calendar days after receiving the complaint”, with 45 calendar days for superannuation trustees and some other cases, and ASIC expects firms to acknowledge a complaint “within 24 hours (or one business day)”. Moneysmart’s page on problems with an adviser gives 14 days and 45 days; RG 271 is the rule ASIC enforces.

  3. Go to AFCA

    If the complaint is not handled to your satisfaction, contact AFCA, which Moneysmart describes as a free service for complaints about financial service providers.

  4. The professional body

    You can also complain to the adviser’s industry association, if they belong to one; the financial advisers register shows which.

  5. Fraud or dishonesty

    If you suspect fraud or dishonesty, such as an adviser spending your money on their own expenses, contact your local police and report the misconduct to ASIC.

What AFCA can look at

AFCA says it can consider complaints about investments and financial advice from a financial firm, covering products including derivatives and hedging, managed investments, securities and real property. Among the issues it lists are advice that was not in your best interests or was inappropriate, and information about fees, costs or risks that was missing or misleading.

It cannot take a complaint that is only about an investment’s performance, with exceptions such as non-disclosure or misrepresentation. Its free call number for complaints is 1800 931 678, 8am to 6pm AEST/AEDT on weekdays.

AskIs the firm I dealt with a financial firm, or a course provider?

For SMSF trustees, ASIC’s Information Sheet 274 says complaints against an SMSF itself cannot go to AFCA, and AFCA cannot resolve disputes between an SMSF’s own trustees, but trustees can complain to AFCA about third-party financial firms that advised them or provided services.

The consumer protection agencies

The ACCC lists one agency for each state and territory. They are sometimes called consumer affairs or fair trading agencies.

Reporting to ASIC

ASIC’s online form cannot take attachments, so ASIC recommends gathering letters, emails and documents such as a Product Disclosure Statement first, to help pick out key facts such as: the date of the misconduct; the name of the person or organisation; their contact details; and details of the financial service or product.

The form has to be finished in one session of about 15 minutes. ASIC says it cannot investigate every report, will only contact you if it needs more information, and is unable to say what action it is taking.

AskDo I have the dates, names and papers together before I start?

Moneysmart’s page on investment seminars says to report it to ASIC when a seminar seems wrong or when you believe a scam has taken your money, and to warn family and friends so they can steer clear of the same scam.

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Sources