How AFCA decides a complaint
The Australian Financial Complaints Authority is the external dispute resolution scheme for credit licensees and AFS licensees. It is free for the client, and a determination the client accepts is binding on the firm. It works differently from a court in three ways that matter for your records.
- The test is fairness. Under rule A.14.2 of the AFCA Rules, for complaints other than superannuation complaints the decision maker must do what is fair in all the circumstances, having regard to legal principles, applicable industry codes or guidance, good industry practice, and previous relevant determinations.
- The rules of evidence do not apply. AFCA's Rules say it is not bound by the legal rules of evidence. There is no cross-examination and usually no hearing. Most complaints are decided on the documents.
- The standard is what most likely happened. AFCA's publication *How AFCA will assess the information you give us* says it takes an evidence-based approach, reviews what each party tells it, and balances that against the available information to decide what most likely happened.
Put those together and the practical result is simple. Nobody gets to stand up and be believed. The file speaks for you, and AFCA weighs it against the client's account.
What AFCA says about contemporaneous notes
AFCA's guidance on assessing information separates two kinds of material. Contemporaneous notes are notes or records made at the time of an event. Its examples include notes made by a doctor during a consultation and notes made by a bank call centre agent during a call. Recollections are a party's account of what they remember, given some time afterwards.
AFCA says contemporaneous notes carry more weight than recollections from some time after the event, because notes made at the time of, or soon after, an event are more likely to accurately detail what happened. Where information conflicts, AFCA decides which information to give more weight to.
AFCA's then Chief Ombudsman, David Locke, put it more bluntly in April 2021 when the Financial Planning Association launched its file note guidance:
Documents created at the same time as the activity or advice in question are usually given more weight than later recollections of what was said or done. This means contemporaneous file notes of conversations and actions are solid gold when a dispute comes to us.
This cuts both ways. The client's complaint is usually a recollection, often written a year or more after the conversation. A note you made on the day generally outweighs it. But a note you wrote after the complaint arrived is also a recollection, and AFCA will treat it as one.
What happens when there is no note
With no note, the dispute becomes the client's memory against yours. Three things then work against the firm.
- The firm is the one expected to have records. Brokers and advisers work under record-keeping expectations. For brokers, ASIC's RG 273.165 lists "relevant conversations with the consumer" among the records it expects. For advisers, ASIC's record-keeping instrument requires records showing how the best interests duty was met. A client has no such obligation. A gap in the firm's file is harder to explain than a gap in the client's.
- AFCA can ask for the file. The AFCA Rules let it require a party to provide information relevant to a complaint. AFCA's Operational Guidelines say that where a party fails, without reasonable excuse, to provide material information that was requested, AFCA will generally proceed on the basis that an adverse inference is drawn from that failure. The Guidelines also note AFCA would not normally draw that inference where the information was destroyed after the period for which it had to be kept had ended.
- Good industry practice is part of the test. Rule A.14.2 has AFCA consider good industry practice. Keeping a record of advice and recommendations is standard practice in both broking and advice. A firm that cannot show what it said has trouble showing that what it said was appropriate.
None of this means a missing note loses the complaint automatically. Emails, application documents, signed disclosures and the client's own later conduct all count. But the conversation is usually where the dispute is, and the note is usually the only record of it. We cover the wider consequences in what happens if you do not keep file notes.
What makes a file note credible
Timing
The closer to the conversation, the better. AFCA's guidance turns on whether a note was made "at the time of, or soon after" the event. Same day is the target. The note should carry its own creation date, separate from the date of the call, and the system it lives in should be able to show when it was really written.
Specificity
A credible note has details nobody would bother to invent: the figure the client mentioned, the question they asked twice, the option they turned down and why. "Discussed risks, client happy to proceed" could have been written about anyone. It gives a decision maker nothing to weigh against a detailed complaint.
The client's own words
Most disputes are about what the client wanted or what they were told. A short direct quote settles more than a paragraph of paraphrase. If the client said "I do not want to fix, we might sell next year", write that down in quote marks. If they later complain they were never offered a fixed rate, the note answers the complaint in their own voice.
What you said, as well as what they said
Record the warnings you gave and the alternatives you put forward. Complaints often allege an omission: nobody told me about break costs, nobody told me the insurance would lapse. The note should show the explanation was given and how the client responded.
Immutability
A note that can be edited at any time with no trace invites the question of when it was really written. A note that is locked when finished, with later changes added as dated amendments, does not. This is the difference between a Word document on a shared drive and a record with an audit trail. For more on how notes hold up outside AFCA, see file notes as evidence.
Consistency with the rest of the file
AFCA reads the note alongside everything else. If the note says the client wanted the lowest repayment and the application shows a 15 year term, the note loses credibility. A note that matches the fact find, the emails and the documents gains it.
For mortgage brokers
Broker complaints at AFCA tend to come down to a small number of conversations: what the client said about their income and expenses, what they were told about fixed rate break costs, why a refi or a larger loan was recommended, and what they were told about fees and timing. Your obligations under the NCCP Act 2009, the responsible lending provisions in Chapter 3 and the best interests duty in s 158LA, are part of the legal principles AFCA has regard to.
ASIC's RG 273.169 already tells brokers that contemporaneous notes are more effective than notes drafted at the end of the process. A note that meets ASIC's record expectations will also serve you at AFCA. See how to write a compliant NCCP file note for the structure.
For financial advisers
For advisers, the SOA or ROA records the advice. The file note records the conversation around it: what the client said about their goals and risk comfort, what was scoped out and why, what was said when the SOA was presented, and what happened at each review. Disputes often turn on exactly those points, because the client agrees the SOA says what it says and disputes what they were told about it.
ASIC's record-keeping instrument for personal advice (ASIC Corporations (Record-Keeping Requirements for Australian Financial Services Licensees when Giving Personal Advice) Instrument 2024/508, which replaced Class Order 14/923) requires licensees to keep records showing compliance with the best interests duty in s 961B, the appropriate advice duty in s 961G and the priority rule in s 961J of the Corporations Act 2001. File notes of client conversations are a core part of that. Our guide to what to record in a financial advice file note goes through it section by section.
How long to keep notes
| Licence type | Period | Source |
|---|---|---|
| Mortgage broker (credit licensee or credit representative) | 7 years from the date of the credit assistance quote, as the practical minimum | NCCP Act 2009 s 120: the client can request a written copy of the preliminary assessment for up to 7 years. You must give it within 7 business days if asked in the first 2 years, otherwise within 21 business days |
| Mortgage broker, BID records | No fixed period. ASIC says use judgement and consider keeping longer | ASIC RG 273.168: depends on the loan term, any interest-only period and whether the client refinances. Short retention puts you at risk of being unable to show compliance |
| Financial adviser (AFS licensee or authorised representative) | At least 7 years after the day the personal advice was provided | ASIC Instrument 2024/508 (notional s 912G of the Corporations Act 2001). ASIC also expects ROAs to be kept at least 7 years |
Seven years is a floor. AFCA's general time limit is six years from when the client first became aware, or should reasonably have become aware, of their loss, or two years from the firm's IDR response if there was one. Awareness can come well after the loan settled or the advice was given. Many licensees and aggregators require longer retention for that reason, and any file that is the subject of a complaint should be kept until the matter is finished. There is more detail in how long to keep file notes in Australia.
Checklist: will this note stand up at AFCA?
| Check | Why it matters |
|---|---|
| Written the same day, with a creation date that can be proven | AFCA gives more weight to notes made at the time of, or soon after, the event |
| Names who was on the call, the channel and the length | Shows the conversation happened and who heard what |
| Client's goals and concerns in their own words | Most disputes are about what the client wanted or understood |
| Figures the client gave you, as they gave them | Answers a later claim that income, expenses or balances were misstated by you |
| Options and alternatives you raised | Answers "I was never told there was another way" |
| Warnings and risks you explained, and the client's response | Answers an alleged omission |
| What the client decided and instructed | Shows the decision was theirs and informed |
| Consistent with the fact find, emails and documents | AFCA reads the whole file together |
| Locked after completion, amendments dated and added separately | Removes any argument about when the note was written or changed |
| Kept for at least 7 years and retrievable | AFCA can ask for it, and failure to provide material information can count against you |
For a scored version, try the free file note audit readiness checker.
Example: the same call, two notes
An invented scenario. A client fixes their whole loan, sells the property 14 months later, pays a break cost, and complains they were never told break costs could apply.
Note A, the kind that does not help:
Spoke to client about fixing. Discussed options. Client happy to fix for 3 years. Proceeding.
Note B, written the same afternoon:
- Why the client called
Marcus rang about fixing his rate after the rate news. He wants certainty: "I just want to know what I am paying for the next few years".
- Plans for the property
Asked about his plans for the property. Marcus said he has no plan to sell, "maybe in 5 years when kids finish school".
- Option he declined
Explained a 50/50 split between fixed and variable, which would keep the offset account working on the variable part. Marcus declined. He wants the loan 100% fixed.
- Risks explained
- Break costs: these apply if the loan is repaid or refinanced during the fixed term. They can be significant if rates fall, and cannot be calculated in advance. Marcus: "understood, we are not going anywhere".
- Offset account: not available on a fixed loan with this lender.
- Extra repayments: capped at $10,000 a year.
- Marcus was OK with both.
- Recommendation
A 3-year fixed rate, because Marcus's priority is certainty.
- Follow-up
- Emailed the lender's fixed rate fact sheet, including the break cost section, on 3 May at 4:12pm.
- Marcus to sign the rate lock form.
Note A proves a call took place. Note B records the question that was asked about selling, the client's answer in their words, the alternative offered, the break cost warning and the client's response, and it points to an email sent the same day that backs it up. If Note B was locked on 3 May, a complaint made 14 months later is a recollection set against a contemporaneous record.
An adviser equivalent, for an invented client who later says they were never told their old insurance would end:
- What we covered
Went through replacing her existing life and total and permanent disability (TPD) cover inside her super.
- Risks explained
- The new policy is underwritten from scratch.
- Her old cover ends once the new policy is in force. Do not cancel the old policy until the new one is issued.
- Exclusions and waiting periods start again under the new policy, and new pre-existing condition terms apply.
- Helen's questions
- Helen asked "so there is no gap?" Confirmed there is none if she keeps the old policy until the new one is issued. Helen will wait for our email.
- Helen raised the difference in premiums. Walked her through the comparison on page 14.
- Client's decision
Helen signed the authority to proceed. No changes to the scope of advice.
Where CallNote fits
The hard part of Note B is writing it at 4pm on a busy day. CallNote is Australian software that turns a call or meeting transcript that already exists into a structured file note in your own format, in about two minutes. It never records calls, never joins meetings as a bot and never stores call audio. The transcript comes in by paste, by .vtt or .txt upload from Teams, Zoom or Meet, by email forward, or automatically from Dialpad or Aircall. After an in-person meeting you can dictate a voice memo instead.
Because the draft is built from the transcript, the client's own words and the warnings you gave are already in it. You review it, correct it, then publish it. A published note is sealed with a SHA-256 checksum and cannot be edited. Amendments are append-only and there is a full audit log, so you can show when the note was written and that it has not changed since. Data is hosted in Sydney, encrypted, and not used to train AI. Notes export to PDF for the client file.
CallNote does not decide complaints or tell you whether your advice was right. It makes the same-day, specific, locked note realistic to produce every time. See CallNote for mortgage brokers and CallNote for financial advisers.
Common questions
Does AFCA accept file notes as evidence?
Yes. AFCA is not bound by the legal rules of evidence and considers all relevant information from both parties. Its publication How AFCA will assess the information you give us says contemporaneous notes, made at the time of an event or soon after, carry more weight than recollections from some time later, because they are more likely to be accurate.
What happens at AFCA if the broker or adviser has no file note of the conversation?
AFCA decides what most likely happened from whatever information exists. Without a note, the firm is relying on its own recollection against the client's, plus any emails and documents. Firms are expected to keep records, so the gap is harder for the firm to explain. AFCA's Operational Guidelines also say an adverse inference will generally be drawn where a party fails, without reasonable excuse, to provide requested information that is material.
Can I write the file note after the complaint comes in?
You can set out your recollection, but label it honestly with the date you wrote it. AFCA treats an account written well after the event as a recollection, which carries less weight than a contemporaneous note. Never backdate or alter an existing note. A changed record can undermine the credibility of the whole file and creates far bigger problems than the complaint itself.
How long do brokers and advisers need to keep file notes for AFCA purposes?
Seven years is the practical minimum. For brokers, s 120 of the NCCP Act 2009 lets a client request the written preliminary assessment for up to 7 years after the credit assistance quote, and ASIC's RG 273.168 suggests keeping BID records longer depending on the loan. For advisers, ASIC Instrument 2024/508 requires advice records to be kept at least 7 years after the advice was provided. AFCA's time limit runs six years from when the client became aware of their loss, so many licensees keep files longer.
What makes a file note credible to AFCA?
Timing, detail and integrity. The note should be written the same day, record specifics including the client's own words and the warnings given, be consistent with the emails and documents on file, and be locked so it cannot be quietly edited later. A vague note such as "discussed options, client happy" gives a decision maker little to weigh against a detailed complaint.
Does AFCA follow previous decisions?
AFCA has regard to previous relevant determinations under rule A.14.2, along with legal principles, applicable industry codes or guidance and good industry practice. Previous determinations are not binding precedents. Each complaint is decided on what is fair in all the circumstances, based on the information provided in that complaint.