Your Guide to the Financial Ombudsman Process

Step 1: Try to Resolve the Issue Directly

Before AFCA can consider your complaint, you must give the financial firm a reasonable opportunity to resolve it. Contact your adviser, their licensee, or the firm's internal dispute resolution team. Explain your complaint clearly and provide supporting documents. The firm must respond within 30 days. If they resolve the issue, the process ends here. If not, you can proceed to AFCA.

Step 2: Lodge Your Complaint With AFCA

To lodge a complaint with AFCA, visit their website and complete the online complaint form. You will need to provide your personal details, the name of the firm you are complaining about, a clear description of the issue, and copies of any supporting documents — including your SOA, advice document, and correspondence with the firm. AFCA will review your complaint to ensure it falls within their jurisdiction.

Step 3: Investigation and Negotiation

Once AFCA accepts your complaint, they will assign a case manager who will investigate the issue. The case manager will contact the financial firm and ask for their response. They may request additional information from both sides. The goal is to reach a mutually acceptable resolution through negotiation. Most complaints are resolved at this stage without needing a formal hearing.

Step 4: Determination and Outcome

If negotiation does not resolve the complaint, AFCA will make a formal determination. The case manager will issue a preliminary assessment and give both parties an opportunity to respond. If the complaint proceeds to a final determination, AFCA's decision is binding on the financial firm but not on you — you can still seek other legal remedies if you disagree with the outcome. AFCA can award compensation of up to $1 million for most complaints.

Tips for a Strong Complaint

Keep detailed records of all communications with your adviser and their firm. Gather your original advice document, any fee disclosure statements, and correspondence. A compliance report can help you clearly articulate the regulatory basis for your complaint. Lodge your complaint as soon as possible — time limits apply.

Overview of the Ombudsman Process

The financial ombudsman process is designed to be accessible and efficient for consumers. When you lodge a complaint with AFCA, the process begins with an eligibility check to confirm AFCA can handle your complaint. Key eligibility criteria include: the financial firm is a member of AFCA (most are), you have exhausted the firm's internal dispute resolution process, and your complaint is within the time limits.

Once eligibility is confirmed, AFCA assigns a case manager who works with both parties to try to reach a resolution through negotiation and conciliation. Most complaints are resolved at this stage. If a resolution cannot be reached, the complaint is escalated to an AFCA ombudsman for a formal determination, which is binding on the financial firm but not on the consumer.

What AFCA Considers in Its Assessment

AFCA assesses complaints based on what is "fair and reasonable" in all the circumstances, considering: the terms of the contract or agreement between you and the firm, the relevant law (including the Corporations Act and ASIC Act), applicable industry codes of practice, good industry practice, and previous AFCA decisions.

For financial advice complaints, AFCA will consider whether the adviser met the best interests duty (s961B), whether the advice was appropriate to your circumstances (s961G), whether proper disclosure was made, and whether you suffered actual loss as a result of the advice. AFCA places the burden of proof on the financial firm to demonstrate that their advice was compliant and appropriate.

Preparing Your Ombudsman Complaint

To give your complaint the best chance of success, prepare thoroughly. Create a timeline of events: when you received the advice, when you first identified the issue, when you complained to the firm, and the firm's response. Gather all documents: SOA or ROA, Financial Services Guide, fee disclosure statements, correspondence with the adviser, and evidence of loss.

Be specific about what you want AFCA to do. If you want compensation, quantify the loss and explain how it resulted from the advice. If you want a fee refund, state the amount and the basis for the refund. AFCA publishes case studies on its website that show how similar complaints have been handled.

Frequently Asked Questions

How long does the AFCA process take?
Simple complaints may be resolved within 30-60 days. Complex complaints involving significant compensation or technical issues may take 6-12 months. AFCA aims to resolve most complaints within 90 days of lodgement.

Can I use a lawyer in my AFCA complaint?
Yes, you can have a lawyer represent you in AFCA proceedings, but it is not required. AFCA is designed to be accessible without legal representation. If your complaint involves a large amount of money or complex legal issues, legal representation may be advisable.

What happens if the financial firm ignores AFCA?
If a financial firm fails to comply with an AFCA determination, AFCA can take enforcement action including suspending or terminating the firm's membership in AFCA and referring the matter to ASIC for regulatory action.

Can I complain to AFCA anonymously?
No, AFCA requires your name and contact information to process your complaint. However, your identity is protected and AFCA will not disclose your personal information without your consent.

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.