AFCA’s 2024–25 Annual Review reported 100,745 complaints, marking the second consecutive year that dispute volumes exceeded 100,000. Although slightly lower than the previous year, AFCA described this volume as “unacceptably high,” noting that industry practices have not kept pace with consumer expectations. The organisation has placed greater emphasis on improving informed‑consent processes, refining wholesale and retail client classification, enhancing documentation standards, and strengthening communication with vulnerable clients. AFCA continues to stress that clear, consistent communication and comprehensive file notes are essential in defending disputes, as determinations rely almost entirely on written evidence. Poor documentation remains one of the leading contributors to adverse findings.
Changing Trends: Key Findings Compared With Previous Years
Despite a modest decline in total complaint numbers, several categories experienced significant increases, signalling systemic issues that compliance managers must urgently address. Investments and advice complaints increased by 18%, largely due to the failures of high‑profile entities such as Shield, United Global Capital, Brite Advisors, and First Guardian. Within this category, SMSF‑related disputes rose by an alarming 95%, accounting for nearly one‑third of all advice complaints. Many of these disputes involved inappropriate SMSF recommendations, errors in wholesale versus retail classification, and insufficient evidence of informed consent.
General insurance complaints rose by 17%, driven by delays in claims handling, issues with add‑on insurance, and communication breakdowns during claims processes. AFCA also recorded a 124% spike in Best‑Interest Duty complaints, with many advisers unable to demonstrate how their recommendations suited the client’s circumstances or provide adequate documentation to support their reasoning. While banking and finance complaints fell by 9% and superannuation complaints dropped by 16%, these areas still contributed substantially to AFCA’s overall workload.
Who Is Complaining? Age, Language and Demographic Trends
AFCA’s demographic insights reveal important patterns that compliance teams must closely monitor. A significant portion of complaints continues to come from clients requiring interpreter support, especially those speaking Mandarin, Arabic, Vietnamese, and Korean. These clients are more susceptible to misunderstanding advice, disclosures, and product terms, often due to communication challenges or the absence of translated materials. AFCA has repeatedly highlighted the need for clearer, culturally accessible communication, as miscommunication with non‑English speaking clients frequently leads to escalated disputes.
Age‑related trends have also persisted. Older clients remain disproportionately represented in disputes involving investments, advice and SMSFs, while younger clients tend to appear more frequently in disputes relating to transactional products, such as personal bank accounts, insurance policies, and credit cards. AFCA additionally reports higher dispute rates among clients facing financial hardship, cognitive limitations, limited digital literacy, or those dealing with complex financial structures such as SMSFs or layered insurance products. These vulnerability indicators require enhanced support and tailored communication strategies.
Products and Services With Rising Complaint Volumes
The products most frequently complained about in 2024–25 were personal transaction accounts, motor vehicle insurance and credit cards. However, the most substantial increases occurred in investments and advice, general insurance, and life insurance. Investments and advice disputes rose sharply due to SMSF issues, failed investment schemes, misleading product information and client classification errors. General insurance complaints surged due to ongoing challenges with add‑on insurance and delays in claims assessment and communication. Life insurance disputes increased by 5%, with AFCA identifying recurring problems in commission disclosure, documentation of informed consent and misunderstandings about policy limitations.
Cost and Time Impact of Complaints
AFCA reported that the average timeframe to resolve a complaint remains 79 days, with more complex matters—particularly those involving advice or investments—taking considerably longer. Although AFCA does not publish specific cost figures, the financial burden on licensees is substantial. Complaints typically require significant staff time for internal dispute resolution, evidence collation and preparation of AFCA submissions. Senior compliance and legal teams are often involved, adding to operational costs. In cases where AFCA makes adverse determinations, firms can face compensation orders, remediation exercises and potential systemic issue investigations. For these reasons, AFCA encourages organisations to resolve matters at the IDR stage whenever possible, as early resolution is consistently more cost‑effective.
Key AFCA Findings Compliance Managers Should Act On
AFCA continues to identify recurring governance and documentation failures that expose licensees to heightened dispute risks. One of the most significant areas requiring attention is informed consent. AFCA has highlighted numerous cases where clients were not provided with sufficient explanation of wholesale or retail classifications, where insurance commissions were insufficiently disclosed, or where verbal consent was not properly recorded. Record‑keeping practices also remain a major concern. AFCA routinely rules against licensees when file notes are unclear, incomplete or inconsistent with the advice provided. Its longstanding position remains unchanged: if it is not written down, it did not happen.
Claims handling processes also require improvement. Many insurers continue to fall short due to delays, inconsistent follow‑up and poor communication regarding claim status. For advice providers, AFCA has emphasised the need for stronger advice governance frameworks, including regular file audits, template reviews and targeted training for supervisors and quality‑assurance reviewers. Protecting vulnerable clients is another priority, with AFCA expecting firms to demonstrate heightened care and clearer communication when dealing with elderly clients, individuals experiencing financial stress, those with limited financial literacy or clients who face language barriers.
Failure to address these systemic weaknesses can lead to serious consequences. Licensees risk adverse AFCA determinations, increased compensation payments, larger remediation programs and reputational damage. In more severe cases, AFCA may also refer matters to regulators for systemic issue investigation. Given that complaint volumes remain above 100,000 for the second year in a row, firms cannot assume that dispute levels will stabilise or decline. AFCA’s expectations are rising, and in its view, the cost of failing to act now far exceeds the cost of prevention.
Organisations should not wait for disputes to arise before strengthening their governance frameworks. AICS can support licensees by delivering dispute‑management workshops, conducting communication‑template and file‑note audits, refining wholesale and retail client classification processes, enhancing informed‑consent procedures and uplifting IDR capabilities. Strengthening documentation, communication and dispute‑readiness processes now will help ensure firms are well‑prepared for AFCA’s increasing expectations during 2026 and beyond.
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