Nick Bruining: Unhappy with your superannuation fund? Here’s how to complain and get the outcome you deserve

It’s a “compare the pair” comparison the industry super funds wish you wouldn’t.

A big lift in complaints about industry super funds features in a recent report released by the Australian Financial Complaints Authority.

Industry super funds took out the top four spots of the most complained about “very large” super funds. AustralianSuper, HostPlus, Australian Retirement Trust and Rest were joined by the former National Australia Bank-owned Nulis Nominees which takes in MLC and Plum.

Nearly 60 per cent of all complaints received related to administration issues followed by life insurance and the distribution of superannuation death benefits.

AFCA is the government authority responsible for handling complaints linked to financial companies operating in Australia. Areas covered include banking, superannuation, insurance, financial advice and buy-now, pay-later providers.

AFCA said that overall complaints for the 2023 financial year increased by 34 per cent on the previous year to a staggering 96,987.

“Super complaints rose 32 per cent overall, but within this was a 136 per cent rise in complaints about claim delays, including payments in life insurance and total and permanent disability insurance claims,” said AFCA chief executive David Locke.

Administration complaints are often linked to delays in processing withdrawal requests, changes to an investment mix or the classification of contributions.

“We are deeply concerned by the volume of complaints consumers are having to escalate to AFCA. It’s not fair on consumers and not good for business. We need to see a significant improvement from firms.”

Financial service providers in Australia typically operate under a licence issued by the Australian Securities and Investments Commission. It’s a condition of the licence that providers have an internal dispute resolution process.

If a client complains and is unhappy with the outcome, the consumer can refer the dispute to an approved free external dispute resolution scheme, which is AFCA. In many cases, disputes are resolved through mutual agreement, but AFCA has the power to direct a particular course of action. These directions are binding on the financial services provider but not on the consumer.

It is a much cheaper way of resolving a dispute than heading to the courts.

How to deal with a problem

• Identify the issue, the cause and contact the original provider of the financial service or product. Make it clear that you are making a complaint and put it in writing.
• Support the complaint with any documentation, the value of the loss and what you want them to do about it.
• The rules require that normally, the internal dispute resolution scheme must deal with the issue between 21 and 45 calendar days from when you send them the complaint.
• If unhappy with the outcome, contact AFCA at afca.gov.au or by calling 1800 931 678. You can then lodge a complaint with AFCA online or in writing. AFCA will determine if the complaint complies with its rules, which are published on their website.
• AFCA will go back to the provider concerned, who will have a further 21 days to work with you to reach a resolution.
• If there’s no outcome, AFCA can refer it to an internal case manager who will endeavour to make contact with you within 7 days.
• AFCA will then assess the claim and the provider’s position and provide a preliminary assessment, at all times trying to resolve the matter.
• If unsuccessful, an ombudsman or panel reviews the complaint and makes a decision.
• That decision is binding on the provider, but not on the complainant. The complainant can still take the provider to court.

AFCA’s involvement is not a guarantee that you’ll get the outcome you want.

Only a quarter of the complaints received by AFCA in 2022 were resolved in the complainant’s favour. In reality, most are resolved at the first stage and directly with the provider concerned.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association