The Australian Financial Complaints Authority is consulting on a proposed new user-pays funding model.

The proposed funding model includes a single registration fee, a simplified complaints fee structure and introduces five free complaints per year to all members. It removes the superannuation levy and brings super funds under the same fee structure as other AFCA members.

Under the proposed model, 66% of fees would be recovered from the 2.5% of AFCA’s members that represent 66% of all complaints received by AFCA.

AFCA says modelling shows the following expected impacts of the proposed funding model:

Banking

The majority of licensee Banking and Finance members (86%) would either experience reduced or the same total annual fees under the future funding model (based on FY21 complaints data).

14% will see an increase, largely due to higher relative complaint volumes.

Insurance

The majority of Insurance members (92%) would either experience reduced or the same total annual fees under the future funding model (based on FY21 complaints data).

8% will see an increase, largely due to higher relative complaint volumes.

Investments and Advice

The majority of Investment and Advice and other lending advisor members (94%) would either experience reduced or the same total annual fees under the future funding model (based on FY21 complaints data).

6% will see an increase, largely due to higher relative complaint volumes.

Superannuation

Removing the super levy means the majority of Superannuation members (82%) would experience reduced total annual fees under the future funding model (based on FY21 complaints data).

18% will see an increase, largely due to higher relative complaint volumes.

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Author: David Jacobson
Principal, Bright Corporate Law
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The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.