This fact sheet outlines who can bring a complaint to AFCA about advice or services provided to a self-managed superannuation fund (SMSF).
Who can bring a complaint to AFCA about advice or services provided to an SMSF?
AFCA commonly receives complaints about SMSFs, in particular, complaints from:
- individuals who have received advice to establish an SMSF, rollover or contribute funds to an SMSF
- SMSF trustees who have received advice about the management and investment decisions of the SMSF, or to wind up an SMSF
- SMSFs who receive credit recommendations
- SMSFs who access lending products
- SMSFs who take out insurance products.
AFCA can consider complaints arising from or relating to financial services provided to the complainant or a person who has a beneficial interest in an investment. It is therefore important to establish who has received a financial service to determine who is the correct complainant to bring a complaint about that service to AFCA.
This may be:
- an individual in their personal capacity
- an individual in their capacity as trustee of the SMSF
- the corporate trustee of the SMSF (with the directors of the corporate trustee bringing the complaint on its behalf), or
- in some circumstances, an individual in their capacity as beneficiary of the SMSF.
When is the correct complainant an individual acting in their personal capacity?
Claims of financial loss properly brought by an individual complainant
Services are typically provided to an individual in their personal capacity when:
- they receive general or personal advice to establish an SMSF
- they receive general or personal advice to rollover or contribute funds to an SMSF
- they receive general or personal advice to cease, commence or alter personally held insurance in conjunction with advice to a trustee to cease, commence or alter insurance held within an SMSF
- an individual is the insured under a policy owned by an SMSF.
These complaints can be lodged with AFCA in an individual’s name.
Please note the above examples provide general guidance only. AFCA will determine the question of who has standing to bring a complaint based on the specific facts and merits of each complaint.
When is the correct complainant a trustee?
Claims of financial loss properly brought by trustee complainant
Services are typically provided to an SMSF trustee when a person, acting as trustee or as a director of a corporate trustee after the SMSF has been established:
- receives general or personal advice on how to invest the SMSF's funds
- enters into a financial services arrangement with a financial firm and the complaint arises from or relates to the provision of those services, including in relation to advice services, stockbroking services, credit and lending services and general or life insurance.
An SMSF must be administered by a trustee. This may be personal trustees, that is natural persons acting as trustees for the fund, or it may be a corporate trustee, that is a separate company usually established with the express purpose of acting as trustee for the SMSF. The director of a corporate trustee company can bring a complaint to AFCA on behalf of the corporate trustee.
The individual or corporate trustee of the SMSF is responsible for its operation. An individual who may become a trustee or a director of a corporate trustee will usually act in their capacity as a trustee in seeking or obtaining financial services once the SMSF is established. When establishing an SMSF, they are likely acting in their personal capacity rather than as a trustee. That person who establishes the fund may also be a beneficiary of the SMSF's assets.
When a complaint arises from or relates to financial services provided to an SMSF, those services are provided to the trustee. The trustee is the proper complainant, if the SMSF still exists. A complaint can be brought to AFCA in this situation by a personal trustee or by the directors of a corporate trustee.
If the SMSF has been wound up, the trustee’s appointment ends. Consequently, the trustee, whether it be an individual or a corporate trustee can no longer bring the complaint to AFCA.
When is the correct complainant an individual acting in their capacity as beneficiary?
If an SMSF has been wound up, the former members or beneficiaries of the SMSF are eligible to bring a complaint to AFCA in respect of a financial firm’s alleged breach of a duty of care owed to the trustee.
This is because any loss suffered by an SMSF which is allegedly caused by a financial firm’s breach of duty owed to the trustee, is a loss suffered by its members or beneficiaries. It is an indivisible claim of all beneficiaries. That is why all beneficiaries need to be complaints for us to hear the matter.
If you are considering winding up your SMSF
If you have a complaint relating to your SMSF before AFCA and are considering winding up the SMSF, you may wish to seek independent financial and legal advice prior to doing so. Winding up the SMSF may have implications for AFCA’s ability to consider your complaint and any potential rights you may have.
AFCA cannot provide such advice.
