What to Do If You Have a Complaint About Financial Advice

Step 1: Raise It With Your Adviser

Start by contacting your financial adviser directly. Explain your concerns clearly and give them a chance to address the issue. Many problems can be resolved at this stage. Your adviser is required to have an internal dispute resolution process and must respond to your complaint within 30 days under Australian law.

Step 2: Escalate to Their Licensee

If your adviser does not resolve your complaint satisfactorily, the next step is to contact their licensee — the Australian Financial Services Licence (AFSL) holder that authorises them to provide advice. The licensee is ultimately responsible for the advice given under their licence. They have their own complaints process and may be able to step in.

Step 3: Lodge a Complaint With AFCA

If you are still not satisfied, you can take your complaint to the Australian Financial Complaints Authority (AFCA). AFCA is a free, independent dispute resolution service. They can investigate your complaint, make the adviser or licensee fix the issue, and award compensation of up to $1 million or more depending on the type of complaint.

What Information You Will Need

To lodge a complaint, you will need your Statement of Advice, any emails or correspondence with your adviser, records of fees paid, and notes from your conversations. Having a clear record of what went wrong and why you believe the advice was not appropriate will strengthen your case.

Time Limits Apply

Be aware that there are time limits for making complaints. Under AFCA's rules, you generally have up to two years from the date you became aware (or should have become aware) of the problem to lodge a complaint. Acting sooner rather than later is recommended.

Step 1: Internal Dispute Resolution

The first step is to contact the licensee and request access to their Internal Dispute Resolution process. Licensees must respond within 30 days. Provide: your name and contact details, the date of the advice, a clear description of your concerns, details of any loss suffered, and copies of relevant documents.

The licensee must acknowledge your complaint within 1 business day and provide a final response within 30 calendar days (45 days in some circumstances). The IDR process should be accessible, timely, and fair.

Step 2: Escalating to AFCA

If you are unsatisfied with the IDR response, or if the licensee does not respond within 30 days, escalate to AFCA. AFCA is a free, independent dispute resolution service handling complaints up to $1 million ($5.36 million for superannuation complaints).

Lodge with AFCA within 2 years of receiving the licensee's final IDR response. AFCA will attempt conciliation. If unresolved, AFCA can make a binding determination requiring compensation, an apology, or other corrective action.

What Compensation Can You Receive?

If your complaint is upheld, you may receive: refund of advice fees, reimbursement of exit fees or costs, compensation for investment losses, compensation for non-financial loss (distress or inconvenience), and reasonable legal costs.

AFCA can award up to $1 million ($5.36 million for super). If your loss exceeds these limits, you may need to pursue court action.

Frequently Asked Questions

Do I need a lawyer?
No. The IDR and AFCA processes are designed for individuals without legal representation. You may engage a lawyer for complex cases, but most consumers navigate the process themselves successfully.

What if the licensee no longer exists or has been wound up?
AFCA can still investigate complaints against former licensees. Licensees are required to maintain professional indemnity insurance and compensation arrangements that remain available even after the business ceases. ASIC may also be able to assist if the licensee has no remaining compensation arrangements.

Can I complain about old advice from many years ago?
Yes, but time limits apply. For AFCA, you generally have up to six years from the date the advice was provided, or two years from the date you became aware (or should reasonably have become aware) of the problem. If your complaint is outside these time frames, AFCA may still accept it in exceptional circumstances.

How long does the AFCA process take?
Most complaints are resolved within 30-60 days through conciliation, where both parties work towards a mutually acceptable outcome. If conciliation is unsuccessful, the case proceeds to a formal determination, which can take several months. AFCA aims to finalise 90% of cases within 12 months of lodgement.

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.