Inappropriate Advice Leads Integrity Financial Planners to Pay $169,000
AFCA has determined that Integrity Financial Planners Pty Ltd provided inappropriate advice that led to a significant loss for a client’s self-managed superannuation fund (SMSF).
Complaint
The complainant (Ms R) is the sole director of a corporate trustee of a self-managed superannuation fund (SMSF). She brought two complaints on behalf of the corporate trustee;
one against financial firm A and this complaint against Integrity Financial Planners Pty Ltd. Her complaint against financial firm A was about inappropriate personal financial advice she says she received in late-2014 from Mr L to:
- to establish an SMSF
- rollover funds from her existing industry superannuation fund
- replace existing life, TPD and income protection cover held with Ms R’s industry fund with OnePath policies funded by the SMSF
- to buy a residential investment property using a limited recourse lending arrangement
- (LRBA), and
- enter into an ongoing advice review agreement
Ms R’s complaint against Integrity Financial Planners was about Mr L’s alleged failure to provide adequate advice review services after he ceased as a representative of financial firm A and commenced as a representative of Integrity Financial Planners on 25 July 2016.
The complaints were joined and an AFCA case manager issued a recommendation in favour of Ms R. Ms R and financial firm A accepted the recommendation. Financial firm A has paid $74,728.15 compensation to the SMSF (with interest) and that complaint was closed.
Integrity Financial Planners rejected the recommendation and said it was not required to review the SMSF’s investment in the residential property because Ms R made the decision to buy it without Mr L’s advice.
Issues and key findings
AFCA determined that Mr L did not provide appropriate advice in the SMSF’s best interests while he was a representative of Integrity Financial Planners.
They also determined that Mr L’s failure to provide appropriate advice while he was a representative of Integrity Financial Planners was a cause of the SMSF’s loss. The start date of the loss must take into account the time needed to sell the property held by the SMSF and to wind up the SMSF. The estimated loss is $169,314.35.
Why is the Outcome Fair?
AFCA determined that the outcome was fair as it compensated the complainant’s SMSF for the losses it incurred as a result of Mr L’s failure to provide appropriate advice to the complainant while he was a representative of Integrity Financial Planners.
Determination
This determination is in favour of the complainant. Integrity Financial Planners must, within 28 days of the complainant accepting the determination, pay $169,314.35 compensation to a superannuation account of Ms R’s choice with interest from 21 January 2021 to the date of payment.
Getting Legal Help for Bad Financial Advice
Contact us if you’re questioning the advice you received from a financial advisor and are thinking about taking steps against them. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial matters. You can contact us online, call us at 1300 433 533 or email us at enquiry@fdlegal.com.au.
