Bad financial advice: How you can fight back

Investors, retirees and working families can lose precious savings through decisions based on misinformation given by people they perceived as trusted professionals. Some people can lose all of their hard-earned nest egg, but it’s not always through negligent advice given by smaller, inexperienced firms.

Beware – bigger financial companies aren’t always better

Sadly, bad financial advice is rife, and it’s not just the rogue operators - large financial institutions are also guilty of steering clients into troubled territory.

In 2011 the Commonwealth Bank’s financial planning arm, Commonwealth Financial Planning Ltd, was sued for negligent financial advice, while in 2013 Macquarie Bank faced a similar scandal when more than 800 clients complained about serious financial mismanagement of its investors’ funds.

Meanwhile, NAB is still battling to regain its reputation for being a solid and dependable financial advisory institution after it began paying millions to compensate clients who received misleading and non-compliant advice.

You can fight back against bad financial advice – and it doesn’t have to cost a fortune

Many investors can feel as though they have no recourse against bad financial advice. They may feel defeated by their loss, overwhelmed by a future that is no longer financially secure or embarrassed that they have been cheated out of their savings and future earnings.

Even if they are aware that there is legal recourse, they are daunted by what they perceive will be a lengthy and costly David and Goliath legal battle. But there is a way to regain your confidence in the future and fight for your lost savings.

Law firms such as Maurice Blackburn specialise in financial disputes and help thousands of average Australians recoup money lost as a result of misleading or bad financial advice. These legal practitioners can help to advise you on the best and most expedient options, and represent you if you decide to pursue the case.

Your options for claiming compensation

The first step is to make a complaint to your financial adviser and the firm they work for. If you’re unhappy with their response, you can do one of two things - take the issue to court or to an industry complaints scheme such as the Financial Ombudsman Service (FOS).

Every client’s situation is different, so you may need to rely on advice from experienced financial advice dispute lawyers such as Maurice Blackburn as to which path is best suited to your circumstances. Taking your case to the FOS will be cheaper but can be more time consuming and there is a $280,000 cap on compensation.

If you decide to take the matter to court, there is no cap on compensation claims and you can also be awarded compensation for loss of opportunity. The process is often quicker, but it may be expensive if you lose the case and are ordered to pay adverse costs.

Specialist dispute lawyers will be able to confidently advise you on your chances for success.

Fighting back against large financial institutions, smaller financial advisers and banks doesn’t have to be onerous and fraught with failure. Many average Australians of all types – retirees, working families and investors - win cases like these. Taking action in court or through the FOS is the best way to regain your lost financial security.

Contact us on 1800 810 812 to see how we can help you recover your losses.

TOPIC: Financial advice disputes
RELATED LEGAL SERVICES: Financial advice disputes

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Josh Mennen

Maurice Blackburn Sydney
Josh Mennen is a Principal in the Superannuation and Insurance practice in Maurice Blackburn's Sydney office. He regularly visits Melbourne, Brisbane and Canberra, and is available to see clients in these locations as well. Josh practices in a range of jurisdictions, including State and Federal courts and tribunals. He has an impressive record representing consumers of insurance products in claims and disputes including life insurance, income protection and superannuation claims. Josh also represents victims of negligent financial planning and stockbroking advice, including through the compensation schemes such as the CBA Open Advice Review Program and the Macquarie Private Wealth compensation scheme. Josh works closely with various unions, and a range of consumer and other community support groups including the Leukaemia Foundation, the MS Society, social workers, financial counsellors and many more. He presents seminars and acts pro-bono for these groups and their members to increase consumer rights awareness, and give a voice to those disempowered by illness, injury and socio/economic barriers. Memberships & Accreditations New South Wales Law Society member Law Council of Australia’s Consumer Law Committee member Australian Lawyers Alliance member ALA Disability Insurance National Special Interest Group Executive Committee member ALA superannuation and insurance spokesperson Financial Planning Association planning and policy committee member ...

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