Interprac Financial Planning To Pay $245,000 To Investor
Interprac Financial Planning has been found liable for providing inadequate financial advice and has been ordered to pay $245,000 in compensation.
Complaint
The complainant is the corporate trustee of a Self-Managed Superannuation Fund (SMSF), represented at AFCA by its sole director, Ms R, and her solicitor. In late October 2014, the complainant received a Statement of Advice (SOA) prepared by Mr L, a financial planner and authorised representative of Interprac Financial Planning Pty Ltd between 6 June 2013 and 20 January 2020.
The complainant says Mr L operated share trading on the account as if under a Managed Discretionary Account (MDA) arrangement and instructions were not sought for each transaction. Over time, the complainant says the agreed asset allocation was not adhered to and the increasing share assets were not comprised of the agreed types of shares and were Speculative.
As a result, the complainant says Mr L failed in his obligations to provide personal financial advice services in its best interests and operated an MDA without the proper authorisation.
Interprac Financial Planning says the complainant is a wholesale investor and the protections which apply to retail clients do not apply to it. Further, they say the loss calculations provided by the complainant artificially inflate the claimed loss.
Issues and key findings
What Obligations Did Mr L Owe To The Complainant?
Mr L was providing personal financial advice and services to the complainant as a retail client and therefore had a duty to act in the complainant’s best interests.
Did Mr L Breach His Obligations To The Complainant?
Yes. Mr L failed to correctly implement the agreed investment strategy and acted outside the authority granted by Interprac Financial Planning’s licence in doing so.
What Is The Appropriate Amount Of Compensation?
The appropriate amount of compensation is the amount that will put the complainant in the position it would have been in had the strategy been implemented correctly. However, the complainant also failed in its duties as trustee by not being engaged in the performance of the SMSF.
Why Is The Outcome Fair?
By not engaging on the claims in relation to liability and causation, the financial firm has effectively accepted both liability and that its conduct has caused the loss. Its submissions on the quantum of that loss have been considered above.
Determination
This determination is in favour of the complainant. The financial firm must pay the complainant $244,553.30 plus interest.
Legal Help After Poor Financial Advice
If you suspect that you have received poor financial advice and need legal aid, please do not hesitate to contact our team of legal experts. We are dedicated to providing our clients with excellent guidance and advice, particularly in financial matters. You can contact us by visiting our website, calling 1300 433 533, or emailing us at enquiry@fdlegal.com.au. Be assured that our top priority is to ensure that you receive the finest quality legal assistance.
