“Our initial, and limited, observations indicate when providing advice in relation to the establishment and use of self-managed super funds, it was common for the financial adviser to fail to properly assess claimants’ existing circumstances before recommending high-risk strategies, often involving significant gearing and concentration risks,” the report stated.

“Advisers frequently did not consider alternative investments that might have met claimants’ objectives better. Additionally, advice was often not in the best interests of the claimants, particularly when advisers had conflicts of interest with the products or services recommended.”

The report continued that more than half of the securities claims related to Dixon Advisory and Superannuation Services, where there was a consistent theme of misleading the claimant. The complaints related to misrepresenting features, and the imminent listing of securities as well as guaranteeing returns or concealing risk.

“The CSLR has received only 18 of the expected 2773 DASS claims. We expect to be able to provide richer insights into the patterns and trends of DASS claims in coming periods,” it stated.

Overall, the CSLR report stated that consistent themes in the first three months of operation include financial advisers misclassifying the risk profile of investments and strategies that are not aligned to their client’s risk profile.

“From our review of claims received to date, issues with personal financial advice represent the largest proportion of claims,” the report stated.

“As a scheme of last resort we are seeing the more extreme cases of financial misconduct. Examples involve misleading and misrepresenting features of funds or products, unauthorised transactions, and recommending high-risk strategies without accurately assessing a consumer’s existing circumstances.”

In its annual report the Australian Financial Complaints Authority said while establishing the CSLR, it also addressed a backlog of approximately 5000 complaints that had been on hold pending CSLR legislation.

It stated this involved updating AFCA’s processes and case management systems to integrate the CSLR framework.

“Recognising the need to provide timely resolutions, we increased staffing numbers and appointed a Senior CSLR Ombudsman to expedite case investigations,” it added.