AFCA is here – now what?

ASIC notification: you will need to notify ASIC of your AFCA membership number by 30 November 2018 by lodging an ASIC Form FS20. This form can be completed through ASIC’s licensee portal (available here). Please note that:

  • If you were a former FOS member: the commencement date you must enter into the Form FS20 is 1 May 2018.
  • If you were a former CIO member: the commencement date you must enter into the Form FS20 is the date you received your AFCA membership certificate
Changes to internal dispute resolution procedures: if you are a Rescue Portal subscriber you will have noticed that we have uploaded new internal dispute resolution procedures to your Portal to replace references to FOS/CIO with AFCA. When notifying your client of their right to take their complaint to EDRS, you will now need to provide your client with AFCA’s details instead of FOS/CIO’s details.
Changes to disclosure documents: all disclosure documents that refer to FOS/CIO will need to be amended to refer to AFCA by 30 June 2019. This includes documents such as Financial Services Guides, Credit Guides and Product Disclosure Statements. We will provide you with wording for these changes in due course. Now is also a timely opportunity to also review the other content within these documents to confirm currency and accuracy.
When making SMSF establishment recommendations in a Statement of Advice (SOA), you will also need to ensure that any reference made to the Superannuation Complaints Tribunal is replaced with AFCA (as AFCA now has sole jurisdiction to hear superannuation complaints). For Rescue Portal subscribers we have already updated the ‘SMSF establishment’ SOA template on the Portal to reflect this. If your SOA templates are held on your internal practice management systems, you must ensure these are updated to reflect AFCA.
PI insurance: the monetary limits and compensation caps of AFCA are almost double those under the FOS/CIO regime (please refer to our previous ‘Get Ready for AFCA!’ news story). If you have not already spoken to your insurance broker about the PI insurance implications of AFCA, please do so immediately.
Wholesale clients: Wholesale clients that receive financial services from you will be entitled to make complaints to AFCA, but AFCA has discretion to exclude those complaints on a case-by-case basis. However, AFCA will not automatically exclude a complaint merely because it is submitted by a wholesale client. On this basis, you should remain vigilant in providing quality services to wholesale clients (and not just retail clients) to avoid adverse claims against you.