Madison Financial Group to Compensate Client
AFCA awarded a Family Trust $66,864.60 plus interest for losses from Madison Financial's advice to invest in products reserved for wholesale investors.
The Australian Financial Complaints Authority (AFCA) has awarded a Family Trust $66,864.60 (plus interest) for loss caused by Madison Financial Group’s (Madison Financial) authorised representative recommendation to invest into several investments that were only available to wholesale or sophisticated investors.
AFCA determined that the authorised representative of Madison Financial recommended three investments which were only available to wholesale or sophisticated investors. At the time of the first two investments the Family Trust did not meet the definition of a wholesale or sophisticated investor. However, at the time of the third investment the advisor was entitled to rely upon the existence of a wholesale investor certificate for the Family Trust.
AFCA found that the Family Trust should not have been recommended to invest into the first two investments as they were only open to wholesale or sophisticated investors. However, given that the Family Trust had a wholesale investor certificate at the time of third investment, AFCA held that the risks of the third investment was adequately disclosed.
Madison Financial was directed by AFCA to pay the Family Trust $66,864.60 (plus interest) for the loss caused by the first and second investments.
If you have concerns with financial advice that you have received, please contact FD Legal on 1300 433 533 or email enquiries@fdlegal.com.au to discuss your matter further.
