If you have a financial advice complaint in Australia, the Australian Financial Complaints Authority (AFCA) is the main external body that handles disputes between consumers and financial firms.
AFCA is a free and independent dispute resolution scheme. It reviews complaints about financial advisers, superannuation funds, insurers, banks and investment providers when an issue cannot be resolved directly with the firm first.
For many Australians, AFCA provides a practical way to have concerns reviewed without needing to consider legal action.
How AFCA works and why it exists
AFCA was created to give consumers access to independent dispute resolution without the cost and complexity of court proceedings.
Financial firms providing personal financial advice to retail clients must be members of AFCA as a condition of their Australian Financial Services Licence (AFSL). This sits alongside other obligations that strengthened after the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
At a practical level:
- AFCA reviews complaints about financial firms
- It operates independently of advisers and licensees
- It is free for consumers
- Financial firms fund the scheme through membership and case fees
- AFCA determinations become binding on firms if the consumer accepts the decision
This framework exists to give consumers somewhere to go if something goes wrong, while also reinforcing accountability across the advice profession.
When you can complain about a financial adviser
Not every disagreement becomes a formal dispute. AFCA generally becomes relevant where someone believes something has gone wrong in the advice process.
This may include situations where:
- Advice appeared unsuitable for your circumstances
- Key risks were not clearly explained
- Advice fees were unclear or incorrectly charged
- Instructions were not followed
- Administrative errors caused problems
- Financial loss may have resulted from advice
For example, a complaint might arise if someone feels a financial planner recommended investments that did not match the risk level they had agreed to.
When personal financial advice is provided in Australia, advisers must consider a client’s objectives, financial situation and needs. This sits within the broader best interests duty that applies when personal advice is given.
Where a complaint is lodged, AFCA may examine whether the advice process followed these obligations based on the information available at the time.
The first step is always the firm’s own complaints process
Before AFCA will usually consider a complaint, you need to raise the issue with the financial firm directly.
All licensed financial advisers must have an Internal Dispute Resolution (IDR) process. This is normally outlined in the Financial Services Guide you receive before advice is provided.
In practice this usually means contacting the adviser or licensee, explaining the concern in writing, and allowing the firm an opportunity to respond.
Firms must respond within ASIC’s regulated Internal Dispute Resolution timeframes, which for most financial advice complaints is 30 calendar days.
Many matters are resolved at this stage once the issue is reviewed internally.
When AFCA becomes involved
If you are not satisfied with the firm’s response, or they do not respond within the required timeframe, you can escalate the complaint to AFCA.
AFCA’s role is not to judge whether an investment performed well or poorly. Instead, it focuses on whether the advice process followed the required standards.
This usually involves looking closely at whether the advice was appropriate based on what the adviser knew at the time, whether risks were explained clearly, whether fees were properly disclosed, and whether the process followed accepted industry standards. To do this, AFCA typically reviews the documents that supported the advice process, including the Statement of Advice, fact find information, meeting notes, fee agreements and relevant product documentation. These records matter because they show what information was considered and how recommendations were explained.
How the AFCA complaint process usually works
While every case is different, most AFCA complaints follow a similar pathway.
- Complaint registration: You lodge a complaint online, by phone or in writing.
- Jurisdiction assessment: AFCA confirms whether the complaint falls within its scope.
- Information gathering: Both parties may be asked to provide documents and explanations.
- Negotiation or conciliation: Many disputes resolve through facilitated discussions at this stage.
- Determination (if needed): If the matter cannot be resolved, AFCA may issue a formal decision.
Most matters resolve before a formal determination is required.
What AFCA can and cannot do
If a complaint is upheld, AFCA can require a financial firm to take steps to resolve the issue.
This can include:
- Compensation for financial loss (subject to AFCA’s monetary jurisdiction limits)
- Refunds of fees
- Corrective actions
- Providing clearer explanations of what occurred
AFCA’s role is dispute resolution rather than regulation. It does not fine advisers or remove licences.
It also does not:
- Provide personal financial advice
- Act as a legal representative
- Guarantee compensation outcomes
Regulatory enforcement remains the responsibility of ASIC.
How AFCA differs from ASIC
A common point of confusion is the difference between AFCA and ASIC.
| Organisation | Main role |
|---|---|
| ASIC | Regulates financial services and enforces the law |
| AFCA | Resolves disputes between consumers and financial firms |
Time limits you should be aware of
AFCA complaints are subject to time limits. These depend on factors such as when the issue occurred, when you became aware of it, and when the firm issued its final response.
Because these rules can be complex, it is usually sensible to act promptly if you believe something has gone wrong.
Common misunderstandings about financial advice complaints
Some people assume a complaint automatically means misconduct occurred. In practice, disputes often arise from misunderstandings, communication gaps, or differing expectations.
A few points are worth keeping in mind.
Investment losses do not automatically mean bad advice
Markets move up and down. AFCA generally looks at whether the strategy was appropriate for your situation and risk tolerance at the time, not whether the outcome was positive.
AFCA does not replace the courts
AFCA provides an alternative pathway. Some matters may still proceed through legal channels depending on the circumstances.
Complaints are part of how the system maintains trust
Strong dispute resolution processes are part of a mature financial system. They allow concerns to be examined fairly rather than ignored.
How to reduce the risk of disputes
Many disagreements come down to unclear expectations rather than serious errors.
Simple habits can reduce the risk of problems later:
- Ask questions if something is unclear
- Read your Statement of Advice carefully
- Make sure you understand how fees work
- Take time to understand risks before proceeding
- Keep copies of important documents
Checking an adviser on the ASIC Financial Adviser Register before engaging them is also a sensible step.
Understanding how the advice process works from the beginning can also help. Many issues that later become complaints start with confusion about scope, costs or risks rather than the strategy itself.
The bottom line
AFCA plays an important role in Australia’s financial advice system. It gives consumers a structured way to raise concerns and have them reviewed by an independent body.
Most complaints follow a straightforward path: raise the issue with the firm first, then escalate if necessary.
For consumers, the value is having access to a fair process. For the advice profession, it helps reinforce accountability in a highly regulated industry.
FAQs
Is AFCA free to use?
Yes. AFCA is free for consumers. Financial firms fund the scheme through membership and complaint fees.
How long does an AFCA complaint take?
Timeframes depend on the complexity of the matter. Some disputes are resolved within weeks, while more complex cases may take several months.
Can I complain about old financial advice?
Possibly. AFCA applies time limits based on when you became aware of the issue and when the firm provided its final response.
Do I need a lawyer to complain to AFCA?
No. Most people lodge complaints themselves. You can seek professional assistance if you wish, but it is not required.
Does AFCA mean the adviser did something wrong?
Not necessarily. Some complaints are not upheld after review. AFCA assesses whether advice met the required legal and professional standards based on the circumstances at the time.
