Shail Singh

Complaints about inappropriate advice and failure to act in a clients’ best interests topped the list for consumers of investment and advice last financial year, AFCA data shows.

In a briefing to AFCA members on Friday, financial advice and investment ombudsman Shail Singh said the industry was “doing extremely well” on reducing complaints from the previous year but the time taken to resolve disputes was still too high – Singh had previously eyed a three month timeframe as being ideal.

The average time to close a complaint was 230 days, up 10 days from last year.

Outside complaints about wealth manager Dixon’s Advisory, which went into voluntary administration in January 2022, and others relating to foreign exchange, the authority closed 2257 advice complaints, down 663 from the previous year, Singh said.

“Whilst there’s a number of factors that lead to that number, including a reduced number of advisors, including market conditions, I still think the industry is doing extremely well on that metric,’’ he said.

He said 106 complaints were closed at registration, 126 closed at case management and 106 went through go to a decision which was “probably a bit higher than what I’d like it”.

“That’s sort of around the 20 per cent mark and really the aim is that it should be 10 per cent or less,’’ Singh said.

“All this adds about 230 days to close an advice dispute which is higher than the average for investments and advice, which is closer to 125 days and its up 10 days from last year,” Singh said.

“My aim is to bring that down and continue to work on bringing it down.”

Singh said the length of time to resolve disputes stayed high when lawyers represented complainants, and when details were technical and complicated.

Meanwhile the authority had 5000 complaints on pause related to insolvency that it was working through to determine eligibility for the new Compensation Scheme of Last Resort, which opens in April 2024.

“Before a consumer can lodge an application with CSLR, which is what they have to do, we need to ensure that the find out we do everything we can to ensure the financial firm will pay,” Singh said.

“That means contacting [professional indemnity] PI insurers, that means getting in touch with the administrator.”

He said the authority then reports a failure to comply with determinations to ASIC before informing consumers that they can lodge a claim for the CSLR.