Financial Advice Disputes

You may be entitled to claim compensation for economic losses due to financial advice received by financial advisors, planners and brokers. You may have a successful claim against your financial adviser or their company if you can show the following:

• Your financial advisor did not comply with the standard practice or with the guidelines set out by ASIC Act and the Corporations Act.
• Your financial advisor acted negligently, breaching their duty of care.
• The financial advisor’s actions or advice caused you to suffer a financial loss.
• The financial advisor engaged in misleading and/or deceptive conduct.

Not all financial advice that results in monetary loss is caused by financial negligence. The basis for a claim is dependent on your individual circumstances, the type of financial advice requested, the information provided, the advice provided by the financial advisor as well as whether this is reasonable advice. Common examples of financial negligence can be as follows

• Recommending a high-risk investment without explaining the risks.
• Advising you to take out a loan for an investment that you could not afford.
• Failure to monitor your investments.
• Failing to assess your current circumstances, financial needs, objectives and risk tolerance.
• Not providing the relevant documents required when providing financial advice, including a Financial Services Guide, Product Disclosure Statement, and Statements of Advice.
• Changing and “churning” investment strategies too frequently.
• Failing to explain the potential risks if the market were to fall.
• Proceeding with investments when the risks are not fully explained or understood.
• Recommending an investment strategy that lacks diversification and therefore increased risk.

Before initiating a financial negligence claim, you can lodge a complaint against your financial advisor through the company’s internal dispute resolution services. The company must acknowledge your dispute within 14 days and respond within 45 days. You can still speak to a representative from Financial Dispute Legal during this process to determine the best course of action to undertake in the future.

If you are unsatisfied with the company’s resolution, you can contact the Australian Financial Complaints Authority (AFCA). There is a compensatory limit, you can also lodge complaint with the court when lodging disputes through AFCA. Complaints can be made to AFCA online via their website or by calling the AFCA on 1800 931 678 (free call).

You can also look to commence a claim in the Court. It is however recommended that you obtain legal advice before you commence a claim in the Court to help ensure this is a suitable option for your circumstances.

The amount of compensation you are entitled to claim will be based on a case-by-case basis. Generally speaking, a successful claim may result in compensation roughly equal to the financial losses you have suffered plus any loss of opportunity to make an alternative investment. This may also include any lost profits or expenses which have occurred in the claims process.

Generally, a claim must be made within 6 years of when the financial loss occurred. Extensions can be granted by the courts, however, this is solely at the court’s discretion. We recommend contacting the team at Financial Dispute Legal as soon as possible to discuss your legal options and time limits.

Financial Dispute Legal offers potential clients a free consultation session in order for us to develop an understanding of your case and individual circumstances. We represent you on a “no win, no fee” (subject to our terms and conditions). We are able to provide client fee estimates before initiating the claim and update these estimates at any stage of the claim.

At Financial Dispute Legal, our team of experts are specialists in the field of compensation claims against financial advisors. We aim to help you understand your legal rights and options in recovering your losses. Our passion at Financial Dispute Legal is utilising our expert knowledge and experience to develop a case that best supports the client’s claim.

The AFCA is a non-government organisation that provides free, fair and independent services to consumers and small businesses to mediate and resolve financial disputes. This organisation encompasses the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT).

The AFCA implements decisions that are binding on financial firms, this can include the compensation of losses due to a financial firm’s error or inappropriate conduct, visit the AFCA page for more information.

Whilst you do not require legal representation to pursue an AFCA complaint, it may however be helpful to obtain assistance from Financial Dispute Legal to help to make sure your claim is presented and pursued appropriately.

Each case is different and the complexity and extent of the loss need to be thoroughly examined. Generally speaking, most claims will be finalised within two years, although this can occur sooner if a settlement is reached.

The process of initiating and pursuing a financial negligence claim is difficult, tiresome and time-consuming. Pursuing legal action without sufficient knowledge of the legal system and its complexities can be highly stressful. By allowing Financial Dispute Legal to represent your case, you will ensure that you have a complete understanding of your current situation and the best possible chance of claiming compensation.