Financial services complaints hit record high

The Australian Financial Complaints Authority (AFCA) has reported an 8 per cent increase in complaints compared with the previous year.

According to Connective, complaints are shifting from straightforward matters, such as administrative errors, to more complex issues, including “best interests duty” disputes and commercial client arrangements.

The aggregator has warned that the trend reflects a need for brokers to tighten processes and maintain robust compliance systems.

“Instead, consumers are more willing to escalate issues, often going straight to AFCA rather than their broker, and AFCA itself is engaging earlier in the process,” Daniel Oh, group legal counsel at Connective, said.

“The result is that complaints are more complex, less predictable and sometimes very costly for brokers to resolve.”

In a recent compliance webinar, Connective urged brokers to improve record keeping, scrutinise documents carefully, and clarify roles and responsibilities with clients.

The group reminded brokers that even referring a loan without lodging is deemed credit assistance and must be treated as such.

Polls of more than 600 brokers during the webinar revealed 76 per cent already consider the risk of future complaints in every file they manage.

A further 91 per cent said they intend to adjust their approach given the findings.

“No broker expects to face a complaint or lender review, but the reality is these events can be stressful, costly and time-consuming,” Oh said.

“By tightening processes and keeping thorough records, brokers give themselves the best possible protection and peace of mind.”