The Financiallink Group To Pay $260,000 After Inappropriate Advice
The Financiallink Group faces a penalty of $260,000 after AFCA determined their advice to be inappropriate.
Complaint
The complainant is a corporate trustee of a self-managed superannuation fund (SMSF). The complainant’s directors received personal advice from The Financiallink Group Pty Ltd to establish the SMSF to purchase a residential investment property in August 2016.
The SMSF was established but there was a delay in the settlement of the investment property. Funds earmarked for contribution toward the purchase of the investment property were initially held in cash. However, in April 2017 the complainant received advice from the financial firm to invest that cash into Fund I. Fund I has since frozen redemptions and is now being wound up. This means the SMSF was unable to complete the purchase of the investment property.
The complainant’s directors say the advice to invest in Fund I was inappropriate and seek compensation. The financial firm has not responded to the complaint.
The case manager has already provided a recommendation on these issues in favour of the complainant.
Issues and Key Findings
Were The Findings In The Recommendation Correct?
Based on the review of the information available, ASIC is satisfied that the disputed advice was inappropriate and caused the complainant’s loss. The findings were correct and are adopted in this determination.
Why Is The Outcome Fair?
It is fair the financial firm should pay compensation to the complainant in circumstances where it has been unable to demonstrate the disputed advice was appropriate and the advice has caused a loss.
Determination
This determination is in favour of the complainant. If the complainant accepts the determination, the financial firm must pay $261,394.90 compensation to the complainant as trustee of the SMSF with interest as set out in Section 2.1 below within 28 days of that acceptance.
The complainant is to provide a transfer of its units in Fund I or an assignment of any dividend received from the liquidation of Fund I if requested by the financial firm.
Another Blow for the Financiallink Group
This is another in a series of cases against the Financiallink Group. Previously, they have had to pay $200,000 and $500,000 in compensation after inappropriate advice to clients.
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.
