Your Rights as a Financial Advice Client

What Australian consumers are entitled to when receiving financial advice

Your Right to Clear Information

You are entitled to advice that is documented in clear, understandable language. Financial advisers cannot hide important information in fine print or complex legal jargon. Your SOA must explain everything in a way that makes sense to you.

Your Right to Know the Costs

You are entitled to know exactly what you are paying for, including all fees, commissions, and any other costs. Your adviser must disclose every dollar you will pay, including ongoing fees and what you get in return.

Your Right to Complain

If you are unhappy with the advice you received, you have the right to complain. Every SOA must include information about the adviser internal complaints process and the Australian Financial Complaints Authority (AFCA), which provides free and independent dispute resolution.

Your Right to Cooling-Off

In many cases, you have a cooling-off period after receiving financial advice or purchasing a recommended product. This gives you time to change your mind. Your SOA should include information about any applicable cooling-off rights.

Your Rights Under the Corporations Act

As a client of a financial adviser, you have important legal rights under the Corporations Act. You have the right to: receive advice that is in your best interests (s961B) and appropriate for your circumstances (s961G), receive clear disclosure of all fees and costs, receive advice documents that are clear, concise, and effective, and be informed of any conflicts of interest.

You also have the right to: receive annual fee disclosure statements and renewal notices (for ongoing arrangements), access your client records, terminate the advice relationship at any time, and complain and seek compensation if the advice was inappropriate.

Your Rights Under Privacy Law

The Privacy Act 1988 and Australian Privacy Principles give you rights over your personal information. Your adviser must: collect only information necessary for providing advice, use your information only for the purpose collected, store your information securely, give you access to your information on request, and correct inaccurate information.

Your adviser must also notify you if your personal information is involved in a data breach that is likely to cause serious harm. You have the right to complain to the Office of the Australian Information Commissioner if you believe your privacy has been breached.

Your Rights If Things Go Wrong

If you believe your adviser has breached their obligations, you have several options. First, use the licensee's internal dispute resolution (IDR) process. The licensee must acknowledge your complaint within one business day and provide a final response within 30 calendar days. If you are unsatisfied with the IDR outcome, escalate to AFCA, which is a free independent dispute resolution service that can award compensation up to $1 million ($5.36 million for superannuation complaints).

You can also report serious misconduct to ASIC directly through their online complaint form. ASIC assesses every report and may investigate or take enforcement action if warranted. In extreme cases involving significant financial loss, you may pursue legal action through the courts. Time limits apply at each stage, so acting promptly is important to preserve your rights to compensation.

Frequently Asked Questions

What is the best interests duty?
The best interests duty (s961B) requires your adviser to act in your best interests by following a 7-step process. This includes identifying your circumstances, considering alternatives, and ensuring recommendations are appropriate.

Can I access my client records?
Yes. You have the right to access your client records held by your adviser or licensee. They must provide copies within a reasonable timeframe, though they may charge a reasonable fee.

What if my adviser does not comply with my rights?
Lodge a complaint through the IDR process. If unresolved, escalate to AFCA. Report serious non-compliance to ASIC.

How do I terminate my advice relationship?
Notify your adviser in writing. If you have an ongoing service agreement, check for notice periods. Request a refund of any prepaid fees for services not yet provided.

What AFCA Complaints Data Shows

The Australian Financial Complaints Authority (AFCA) received 104,861 complaints in 2023-24, an 8% increase from the prior year. Of these, 3,559 were about investments and advice, though excluding Dixon Advisory complaints, investment and advice complaints reached an all-time low of 2,709 — reflecting improvements in education standards and industry professionalism.

Key findings from AFCA's complaints data:

• Inappropriate advice remains the most common complaint type in financial advice disputes.
• Dixon Advisory: 2,773 total complaints received since AFCA's inception. Of these, 98.2% of determined complaints were found in favour of complainants, with $35.6 million awarded in compensation and an average of $329,996 per determination.
• Financial difficulty complaints rose 18%, including concerns about inadequate responses to hardship applications.
• Scam complaints surged 81% to 10,951, though they declined in the latter part of the year (averaging 500 per month vs. 900 previously).
• Licensees with most advice complaints (FY24): AMP Financial Planning (30), InterPrac Financial Planning (14), Madison Financial Group (11), NextGen Financial Group (10).

AFCA resolved 70% of scam complaints within 60 days, with 67% resolved at the first stage (referral to the firm). Of complaints that progressed to investigation, 60% resulted in full or partial compensation. Only 2% went to formal determination by an ombudsman.

Source: AFCA Annual Review 2023-24, AFCA Datacube statistics, Parliamentary submission on DASS.