Welcome to the latest issue of the KHQ Super Alert. This week, AFCA released its preliminary complaints data for the 2023/24 financial year as well as its finalised schedule for issuing future guidance. A new ASIC instrument was also registered relating to disclosure methods for ETFs and quoted ED securities.

AFCA – Preliminary complaints data for last financial year released

On 1 August 2024, AFCA issued a media release containing its preliminary data findings about complaints it has received in the 2023/24 financial year. According to AFCA, the overall number of complaints for the financial year rose by 9% to more than 105,000.

AFCA has noted that it has ‘started to see instances of sophisticated scam activity in the superannuation sector’. Chief Ombudsman David Locke is quoted as saying that AFCA ‘urge[s] super fund trustees to review the steps they have in place to protect members from fraud…[t]he fact that scam and unauthorised transaction complaints in super are still low means there’s a window of opportunity for trustees to act so we don’t experience the sorts of issues seen elsewhere’.

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ASIC – Changes to disclosure methods for ETFs and quoted ED securities

 On 31 July 2024, the ASIC Corporations (Amendment) Instrument 2024/630 was registered on the Federal Register of Legislation. The instrument makes amendments to both the ASIC Corporations (Facilitating Electronic Delivery of Financial Services Disclosure) Instrument 2015/647 and the ASIC Corporations (Periodic Statement Relief for Quoted Securities) Instrument 2024/14.

According to the Explanatory Statement, this instrument ‘introduces additional circumstances when investors may be given electronic notification of periodic statements for quoted [enhanced disclosure] securities and interests in [exchange traded funds] and removes the requirement to disclose fund performance information in the periodic statements’ for these products.

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Treasury – Release of Government responses to House Committee reports

On 30 July 2024, Treasury released the Government’s response to various House Committee reports. In relation to the inquiry into housing affordability and supply in Australia, the Government said that the Committee had recommended in March 2022 that first home buyers be allowed to use their superannuation ‘as security for home loans’. The Government has advised that ‘given the passage of time since this report was tabled, a substantive Government response is no longer appropriate’.

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AFCA – Schedule for new complaints guidance released

On 26 July 2024, AFCA published its final schedule in relation to the approach documents it will create or amend for the 2024/25 financial year. As reported in our Super Alert of 21 June 2024, AFCA released the proposal schedule for consultation that ran until 27 June 2024.

The superannuation-related documents that will be created or amended are:

• ‘Approach to sections 29 (6) and (7) of the Insurance Contracts Act (Cth) (ICA)’;
• ‘Approach to delayed insurance claims in superannuation’; and
• ‘Approach to superannuation death benefits’.

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ASIC – Financial adviser banned for five years

 On 26 July 2024, ASIC issued a media release announcing that a NSW-based financial adviser has been banned for five years from providing any kind of financial services, as well as cancelling the AFS licence of his business. ASIC found that the adviser ‘failed to prioritise the interests of his clients when he recommended that his clients enter into an ongoing service program without assessing if the clients required the service or could afford the service’, gave inappropriate advice, failed to make reasonable enquiries about clients’ circumstances and objectives and did not disclose conflicts of interest.

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