Financial Advice Disputes

Many Australians get financial advice from experts about investing their hard-earned money, usually for their retirement. Most financial advisers give good and appropriate advice. But sometimes, financial advice can be negligent or misleading and result in significant financial losses. If you suffer financial losses because of negligent financial advice you may be able to lodge a complaint to the Financial Services Ombudsman (FOS).

Monaco Solicitors are experts in financial advice disputes and we will look at your documents and provide a free consultation to discuss your case and Represent you in any claim, complaint to FOS.

Common Questions

What are Financial advisers usually required to do?
  • Do a Financial Needs Analysis (FNA) to work out your financial needs, risk tolerance and your knowledge of types of investments and share markets etc.
  • Prepare a written Statement of Advice (SOA) setting out the recommended investment advice based on the above.
  • Get your agreement to that SOA or an amended one.
  • Implement the investments based on the SOA. and
  • Only make any significant changes if they do a new FNA or SOA.
If any of the above are not followed and you suffer financial losses, you may have a claim for compensation for the losses.
Types of claims you can potentially make against a financial advisor?
  • They didn’t follow all the correct procedure.
  • Said you were a risky investor-when you are conservative.
  • Recommended a risky investment strategy but didn’t warn you of the risks.
  • Recommended you borrow money to pay for investments but didn’t fully explain the risks of this e.g. if you’d if you can’t afford the loan repayments.
  • Put you in investments that were too risky or didn’t spread the investments enough.
  • Didn’t explain the downside if markets fall.
  • Didn’t explain the effect of investments on Centrelink, compensation or insurance benefits you have.
  • Failed to monitor the investments when they said they would.
  • Changed or churned the investments too much.
  • Cross sell you into a product they were interested in.
Why should I have legal representation?
Receiving bad financial advice can have devastating consequences for your future. Fighting a financial advice organisation and their insurer on your own when you have a dispute is difficult, tedious, time-consuming and involves a lot of fine print and red tape. Monaco Solicitors will explain your legal rights and provide advice about whether you should take legal action to seek compensation. Time limits apply for many financial advice dispute claims. Our solicitors are experts in this area of financial advice dispute law. We will make the process easier for you by providing straight-forward legal advice – starting with whether or not you may have a legal case.
What are my legal avenues?
If you have received bad financial advice, you should start by making a formal complaint with your financial adviser and their company. If their response is unsatisfactory, you can appeal to the courts or to an industry complaints scheme such as the Financial Ombudsman Service (FOS). There are advantages and disadvantages when going to FOS or court, and there are important time limits for lodging disputes. Monaco Solicitors experienced financial advice dispute lawyers can advise about this and represent you in the formal complaint stage as well as at FOS or in court. Financial Ombudsman Service Advantages
  • No fees charged by FOS.
  • Costs neutral - each side pays their own costs.
Disadvantages
  • Disputes take longer to resolve (currently 18 months - 2 years).
  • Settlements less likely.
  • No compensation for indirect loss.
  • $280,000 cap on the compensation.
Court Advantages
  • No dollar cap.
  • Usually quicker than FOS.
  • Settlements common.
  • Discovery compulsory.
  • Can award compensation for loss of opportunity.
Disadvantages
  • Expensive if you lose.
  • Risk of adverse costs order.
What are my financial advice dispute legal rights?
There are rules defining how financial advisers should deal with their clients. These include:
  • Corporations Act 2001.
  • Australian Securities and Investments Commission's (ASIC) regulatory guides about minimum standards of behaviour.
  • Financial Planning Association of Australia's Rules of Professional Conduct.
Your financial adviser is required to:
  • know their client.
  • know the financial product they are promoting.
  • give appropriate advice.
  • make statutory disclosures.
If you've suffered loss as a result of negligent financial advice from a financial planner or financial institution you may be entitled to compensation.
What financial information should I provide to my adviser?
Your financial adviser must understand your financial situation so they can provide appropriate advice to you. To do this, you are required to provide information about relevant personal circumstances. This will normally include:
  • need for regular income (eg retirement income).
  • need for capital growth.
  • desire to minimise fees and costs.
  • tolerance of the risk of capital loss, especially where this is a significant possibility if the advice is followed.
  • tolerance of the risk that the advice (if followed) will not produce the expected benefits.
  • existing investment portfolio.
  • need to be able to quickly cash-in the investment.
  • capacity to service any loan provided in relation to a financial product.
  • tax position.
  • social security entitlements.
  • family commitments.
  • employment security.
  • expected retirement age.
Why Trust MLC
This practice group is supervised by senior lawyers who are have many years of experience in this field. Our lawyers are widely known in the industry due to their track record of success in the field of Financial Advice law. Over the years we have finalised thousands of claims on behalf of our clients - from small claims settled through negotiations to multi-million dollar court actions. We are dedicated to supporting our clients at every stage of the process, from the initial consultation through to a resolution. we note that the expenses of preparing a claim can cause great concern, so we cover all expenses. We have the ability to go toe to toe with the financial advisors and their insurers, who will often expend substantial resources defending claims.

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