Investments you can complain about

AFCA can consider complaints from consumers and small businesses about a range of different types of investments including:

Derivatives and hedging

  • Contracts for difference: A contract between two people that mirrors the situation of trading a security, without actually buying or selling the security. The two parties make a contract that the seller will pay the buyer the difference in price after a certain period of time if the designated security's price increases, and the buyer will, in return, pay the seller the difference in price if the security's price decreases.
  • Foreign exchange: Cash or other claims (for example, bank deposits and bonds) on another country, held in the currency of that country. We only have jurisdiction to consider a complaint if the product is governed by Australian law.
  • Forwards: A future commitment that has terms established now; a contract under which one side will buy and the other sell a specific asset at a set price on a given future date.
  • Futures: An agreement to buy or sell a standard quantity of a product, such as gold or $US, on a specific future date at an agreed price determined at the time the contract is traded on the futures exchange.
  • Options: The right to buy or sell shares or securities at a set price and within a set period. The buyer/seller has the right, but not the obligation to buy or sell.
  • Swaps: An arrangement in which two entities lend to each other on different terms.

Managed investments

  • Australian equity funds: A fund that invests primarily in Australian stocks, allowing investors to buy into the fund and thus buy a basket of stocks more easily than they could purchase the individual securities.
  • Cash management accounts: An account that uses a management tool to ensure that sufficient cash is available to meet current and future liabilities, with any surplus being safely invested to generate the maximum income.
  • Charitable/educational schemes: Funds that are established and are operated for a charitable or educational purpose, such as scholarship funds.
  • Film schemes: A management investment scheme where people are brought together to contribute money to aquire an interest in the scheme ('interests' in a scheme are a type of 'financial product' and are regulated by the Corporations Act 2001 (Cth)). The money is pooled with other investors (often many hundreds or thousands of investors) or used in a common enterprise.
  • Horse schemes: Investment schemes centred upon the co-ownership of a horse for the purpose of financial advantage, such as racing and breeding syndicates.
  • International equity funds: An international equity fund is an open or closed-end fund that invests primarily in overseas shares/securities and other assets, allowing investors to buy into the fund and buy a basket of stocks more easily than they could purchase the individual securities.
  • Investor directed portfolio services: An investor directed portfolio service (IDPS) is a service for acquiring and holding investments that involve arrangements for the custody
  • Managed discretionary accounts: Generally, managed discretionary accounts (MDAs) are arrangements that involve a person (an MDA operator) managing a portfolio of assets for a retail client on an individual basis. The MDA operator makes discretionary decisions on behalf of the client (does not need to get authority from the client for each transaction), but this is done in accordance with an agreed investment strategy.
  • Managed strata title schemes: A managed strata title scheme is when an investor in a strata (apartment) unit has a right (by agreement or an understanding with the promoter) to a return that depends, in whole or in part, on the use of other investors' strata units (as opposed to common property). For example, your return depends on an arrangement for pooling income or for fairly allocating tenants.
  • Mixed asset funds: Multiple managed investments or mixed funds. (So you might have an investment portfolio involving various managed investments).
  • Mortgage schemes: A managed investment scheme that has most of its non-cash assets invested in mortgage loans.
  • Primary production schemes: Schemes where the investor is really a 'grower' of the primary product (for example, tea trees, pine trees, paulownia trees, olives, viticulture, beans, coffee). The investor/grower usually enters into an agreement with the manager/responsible entity for the scheme to plant, establish and maintain the trees until they are harvested at maturity.
  • Property funds: A type of collective investment where investors collect their money together and a professional manager operates the scheme, which invests in residential or commercial properties.
  • Timeshare schemes: A timeshare scheme is a scheme in Australia or elsewhere, where participants are entitled to use, occupy or possess, for two or more periods, property to which the scheme relates and operates for not less than three years.
  • Trustee common funds: Funds invested by trustees who are empowered to pool monies in common funds despite the fact that the monies were received from individual trusts.

Securities

  • Bills of exchange: A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand – or at a fixed or determinable future time, a certain sum in money to, or to the order of, a specified person or to the bearer.
  • Bonds: A bond is a statement of debt and is issued by governments, companies, other entities and individuals in return for cash from lenders and investors.
  • Debentures: A debenture is one way for a business to raise money from investors. In return for your money, the business (or ‘issuer’ of the debenture) promises to pay you interest and pay back the money you lend them (or your ‘capital’) on a future date.
  • Exchange traded funds: A managed fund that is traded on a stock exchange.
  • Promissory notes: A promissory note is a written promise, free of any conditions, to pay an agreed sum of money to someone at a fixed time in the future. Most commonly they are used to raise short-term finance.
  • Shares: A share is simply a part-ownership of a company. For example, if a company has issued a million shares, and a person buys ten thousand shares in it, then that person owns one per cent of the company.
  • Warrants: A certificate giving the holder the right to purchase securities at a stipulated price within a specified time span, or in some cases, indefinitely. Warrants are sometimes attached to other securities as an added purchase inducement and may be traded separately after issue. They are similar to call options. Warrants have all the other features of shares – entitlement to dividends, tradeable on the share market and price goes up and down depending on the underlying share price.

Types of complaints AFCA can consider about investments and financial advice

There are several issues you may want to complain to us about regarding your investment or the financial advice you have received:

  • Advice that a financial firm gave you about financial products, which you believe may have been inappropriate, misleading or insufficient, We also consider complaints where the financial firm failed to act in your best interests or failed to prioritise your interests in providing financial advice. An example of this is where you were given inappropriate product or investment strategy advice, inappropriate client advice, or general financial advice was provided when personal advice was needed.
  • Charges that were incorrectly applied, or fees/costs that were calculated or charged incorrectly – or were not charged in accordance with the information that was provided to you. This includes incorrect commissions (including commissions that were either wrongly calculated or not due to them).
  • Disclosures that the financial firm didn’t make – such as incorrect, insufficient or misleading information about the risks of an investment product; the product disclosure statement or other required documents; how the investment operated or about the product they provided to you.
  • Decisions your financial firm has made or failed to make; for example, to liquidate your open contract for difference ( ) positions without making a margin .
  • Instructions you gave that weren’t followed; for example, non-redemption of funds following a redemption request you made; failure to sell stock as instructed; failure to buy or sell another type of financial product when requested to do so.
  • Privacy and confidentiality including where you are refused access to personal information, and other privacy breaches including inappropriate collection or use (including disclosure) of personal information.
  • Service including delay or where the financial firm has failed to meet a special need or requirement such as language assistance or other forms of accessible access. Service issues also apply to incorrect information being supplied or recorded about you and your accounts, where online access to your accounts is not working, and loss of documents or property.
  • Transactions including purchase or sale of investments without written or verbal authority to do so.

Detailed information about these issues is available on the Issues AFCA considers page.

Complaints we can’t consider

If you have a complaint relating to the management of a fund or scheme as a whole, AFCA generally can’t consider your complaint.

There are other places you can ask for assistance to resolve your complaint.

We also can’t consider complaints about the level of a fee, premium, charge, rebate or interest rate – unless your complaint is about one of the issues outlined on this page (for example, if you are complaining about a fee that was not disclosed to you, or was misrepresented to you, or if the complaint is about a breach of a legal obligation on the part of the financial firm).

We won’t consider complaints that we have already dealt with, unless there is sufficient additional information or different circumstances raised in the new complaint.

In most cases, we also can’t consider a complaint that has already been dealt with by a court, dispute resolution tribunal established by legislation or a predecessor scheme.

More information is available in our Rules (section C.1 Mandatory Exclusions). Even if a complaint is not excluded on a jurisdictional basis, we may decide not to consider the complaint any further if we consider it appropriate to do so.