Advice complaints see biggest increase in FY26: AFCA

Despite only accounting for less than 10% of the total complaints lodged, investment and advice complaints have seen the steepest increase in FY26, data from the Australian Financial Complaints Authority (AFCA) shows.

AFCA received a record 119,949 complaints in the 12 months to June end, the highest number on record and the third consecutive year complaints have exceeded 100,000.

Investments and advice complaints increased by 56%, primarily driven by the Shield Master Fund and First Guardian collapses, while complaints alleging the failure to act in the client's best interest remained the top issue with a 65% increase on last year, up to 2083.

AFCA previously highlighted financial services businesses are failing to provide consistent outcomes due to its fragmented resolution frameworks.

AFCA chief customer officer Deborah Jenkins said despite most practices remaining compliant, the detriment from a single incident is too significant.

"While most financial advice firms do the right thing, we are seeing a significant number of complaints stem from major financial collapses that have affected thousands of consumers," Jenkins said.

"These matters are complex and can be incredibly stressful for individuals and their families."

Responding to the high volume of complaints in relation to the collapsed managed investment schemes, AFCA streamlined some 1800 complaints in a lead decision approach late last year to deliver a "consistent and fair" outcome for all affected investors.

Meanwhile, complaints for super (8755) also increased significantly (up 42%), highlighting the delays in claim handling, service issues and rejection of insurance claims as the most common issues.

Rejection of claim complaints increased a whopping 82% compared with the previous year, AFCA said, while scam complaints rose 12% to 6706 following a decline the previous year.

Jenkins believes the numbers reflect the continued threat scams pose to Australian consumers.

"Scammers are becoming more sophisticated in how they target consumers. Resolving disputes is important but preventing scams before they happen is even better. That's why broader scam prevention efforts are so important," Jenkins said.

Overall, the three most complained about financial products in 2025-26 were personal transaction accounts, motor vehicle insurance and credit cards.

Banking and finance remained AFCA's largest complaint area, with financial difficulty complaints increasing 17% and credit reporting complaints rising 22% across the year, with a steep rise in recent months.

Jenkins said three years of more than 100,000 complaints highlights the challenges many consumers continue to face in a difficult economic environment.

"These numbers highlight the impact that ongoing cost-of-living challenges and economic uncertainty are having on consumers, and the flow-on effects these conditions can have across the financial system," Jenkins said.

"Complaint data is one of the clearest signals firms have about what's going wrong for their customers. Firms that use those insights to improve are more likely to prevent the same problems happening again.

"We'll continue to share the insights we're seeing through our complaints data with firms, so they have the opportunity to identify emerging issues early and improve outcomes for their customers."

Since establishment in 2018, AFCA has received close to 700,000 complaints and secured some $2.6 billion in compensation or refunds for affected consumers and businesses.