{"id":15947,"date":"2025-07-23T12:40:18","date_gmt":"2025-07-23T12:40:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/15947\/"},"modified":"2025-07-23T12:40:18","modified_gmt":"2025-07-23T12:40:18","slug":"afca-flags-impending-cost-of-shield-first-guardian","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/15947\/","title":{"rendered":"AFCA flags impending cost of Shield, First Guardian"},"content":{"rendered":"

Home<\/a> > Financial Planning<\/a> > AFCA flags impending cost of Shield, First Guardian<\/p>\n

\"Graphic<\/p>\n

The Australian Financial Complaints Authority (AFCA) has flagged the degree to which it expects the Shield Master Fund, First Guardian Master Fund and United Global Capital collapses to feed through to costs in the system.<\/p>\n

While complaints relating to financial advice appeared to have decline markedly in recently years, the latest annual AFCA data has confirmed that on the back of the Dixon Advisory collapse, Shield and First Guardian complaints had helped drive an 18% increase for the sector.<\/p>\n

What is more, AFCA chief ombudsman and chief executive, David Locke backed the Compensation Scheme of Last Resort (CSLR) as appropriate in such circumstances.<\/p>\n

Releasing its 2024-25 data, Locke confirmed there had been an 18% increase in complaints in the investment and advice sector to 4,193 complaints.<\/p>\n

The good news for financial advisers facing into funding the Compensation Scheme of Last Resort is that their sector is still less problematic that banking and insurance, but the bad news is the number of problems already on AFCA\u2019s books.<\/p>\n

According to Locke, the three most complained about financial products overall in 2024-25 were personal transaction accounts, motor vehicle insurance and credit cards. The top three issues were misleading product or service information, delay in insurance claim handling, and service quality.<\/p>\n

\u201cInvestment and advice complaints rose 18 per cent amid a string of failures,\u00a0including United Global Capital, Shield Master Fund, First Guardian Master Fund, and Brite Advisors PL,\u201d he said.<\/p>\n

There was an allied 95% rise in complaints involving self-managed super funds (SMSF) to 1,323 complaints, accounting for a third of complaints in investments and advice. Complaints alleging failure to act in the client\u2019s best interest rose 124 per cent to 1,266.<\/p>\n

\u201cWhat we\u2019re seeing in complaints is a clear pattern of conflicted advice models and the inappropriate use of self-managed super funds that ultimately isn\u2019t in the customer\u2019s best interest,\u201d Locke said. \u201cThis only highlights the need for the Compensation Scheme of Last Resort for victims of unlawful advice.\u201d<\/p>\n

Locke welcomed an improvement in claim handling by superannuation funds, with complaints about delays in claim handling falling 39 per cent in 2024-25.<\/p>\n

\u201cThe reduction in superannuation complaints is a positive sign that improvements are being made, but we\u2019re still concerned that the top three issues relate to service quality and we urge superannuation funds to improve service standards,\u201d he said.<\/p>\n

AFCA received more than 100,000 complaints for a second successive year with the following being the break-down:<\/p>\n

Banking and finance 54,581 complaints (down 9%)
\nGeneral insurance 34,231 complaints (up 17%)
\nSuperannuation 6,164 complaints (down 16%)
\nInvestments and advice 4,193 complaints (up 18%)
\nLife insurance 1,518 complaints (up 5%)<\/p>\n","protected":false},"excerpt":{"rendered":"Home > Financial Planning > AFCA flags impending cost of Shield, First Guardian The Australian Financial Complaints Authority…\n","protected":false},"author":2,"featured_media":15948,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[17383,64,63,99,17384,17385,186,17386,184,185,17387,17388],"class_list":["post-15947","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-afca","tag-au","tag-australia","tag-business","tag-cslr","tag-dixon-advisory","tag-finance","tag-first-guardian-master-fund","tag-personal-finance","tag-personalfinance","tag-shield-master-funds","tag-united-global-capital"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/15947","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=15947"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/15947\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/15948"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=15947"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=15947"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=15947"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}