Personal advice 5th most common complaint made against investment and advice firms in 2023/24

Of that, 3,288 complaints were made in relation to “personal advice”, ASIC said in its first publication of industry-wide data reported under the IDR framework.

The corporate regulator broke that number down further, revealing that 965 complaints were related to service-related issues, 654 were in relation to the quality of advice provided, 392 were about personal advice fees/costs, 248 were about general service delays, and 593 were in relation to “other” advice-related issues.

Overall, complaints made against financial firms – relating to investments and advice - numbered 72,238.

ASIC noted that 63 per cent of these were resolved on the same day, with more than $13 million in total monetary remedy provided.

The top three products for investments and advice complains were shares (52 per cent), investor directed portfolio services (11 per cent), and other managed investments (7 per cent).

Personal advice rounded out the top five products for investments and advice, in fifth place.

This, ASIC said, applies to a recommendation or opinion about a financial product that is tailored to a consumer’s personal circumstances. It takes into account one or more relevant aspects of a consumer’s personal circumstances (such as their financial objectives, situation and needs), or is given in circumstances where a reasonable person would expect that their individual circumstances have been considered.

“Personal advice providers must act in a consumer’s best interests when providing personal advice, which can range from simple, single-issue advice to comprehensive financial advice and/or ongoing advice,” said ASIC.

Under new data reporting requirements, most licensed financial firms are required to report IDR data to ASIC on a six-monthly basis.

According to ASIC, this inaugural industry-wide report is a key milestone in the implementation of the framework.

ASIC commissioner Alan Kirkland said it is important for firms to foster a positive complaints management culture, including a focus on gathering accurate data, adding that firms should reflect on the detailed requirements and practical guidance outlined in ASIC’s IDR data reporting handbook.

“The gaps we’ve identified suggest there may be inconsistent IDR reporting practices across the industry,” said commissioner Kirkland.

“While there may be reasonable explanations for some of these variances, we encourage firms to carefully review our report and guidance to assist in reporting complete and accurate IDR data. Starting from next year, we’ll be publishing data about complaints received by individual firms. It is crucial that firms act now to address any gaps in IDR reporting processes, because we will publish the data as it is reported to us.”

More to come.