Pulse Markets to Compensate Client for incorrect Wholesale Investments
Pulse Markets are required to compensate their client for incorrectly recommending the client invest into shares only suitable for wholesale investors. The investor was the trustee of a Self-Managed Superannuation Fund and a trust who participated in a number of corporate capital raising rounds offered by Pulse. However, the investments were only open to investors who met the wholesale investor test under the Corporations Act and should not have been recommended to the client who was a retail client.
Pulse Markets are required to compensate their client for incorrectly recommending the client invest into shares only suitable for wholesale investors. The investor was the trustee of a Self-Managed Superannuation Fund and a trust who participated in a number of corporate capital raising rounds offered by Pulse. However, the investments were only open to investors who met the wholesale investor test under the Corporations Act and should not have been recommended to the client who was a retail client.
AFCA held that the shares were too risky for the complainant and there was no evidence to support a finding that they were assessed as a sophisticated investor. Also Pulse Markets failed to assess the complainants relevant experience as an investor and at all material times had been provided with personal advice around the recommended investments. AFCA held that the financial firm’s representative wrongfully provided financial product advice to the complainants without having a proper basis for doing so in the absence of appropriate disclosure and having fulfilled their best interest duties. Pulse Markets was required to compensate the complainants almost $130,000 for the bad financial advice.
Financial Advisor should only recommend investment which are suitable for their clients goals, objectives and understanding as investors. Investments which carry high risks such as IPO or capital raising investment should be recommended to suitable clients not unsophisticated or inexperience investors. If you feel you have received bad advice to invest into risky stocks, we encourage you to speak with FD Legal to determine if you have a claim to recover your losses. You can contact us online, call us on 1800 433 533 or email us at enquiry@fdlegal.com.au
