Bad financial advice and your right to fight back

When financial advice disputes arise

Financial advice disputes can be complex. Advice is often given years before its consequences become clear, and problems may only surface once financial loss has already occurred.

Disputes commonly arise when:

• advice was inappropriate for your circumstances
• your adviser failed to review or adjust their recommendations over time
• conflicts of interest were not disclosed
• critical risks or limitations were not clearly explained

When losses come to light, people are often left facing significant financial stress and uncertainty, with limited clarity about their options.

It’s not just small operators giving bad financial advice

Many people assume bad financial advice only comes from rogue or inexperienced advisers at smaller firms. Unfortunately, history shows that large institutions have also caused serious harm. Over the past decade:

• the Commonwealth Bank’s financial planning arm was sued for negligent advice, leading to the Open Advice Review Program and around $23 million in compensation
• Macquarie Bank paid approximately $24.7 million to more than 800 affected clients
• the 2019 Royal Commission exposed systemic misconduct across the financial services industry, with $4.7 billion in compensation paid or offered by 2022

These failures led to major reforms, including stronger best‑interests duty and related obligations and the Compensation Scheme of Last Resort (CSLR), introduced in 2023.

The problem doesn't stop with the big end of town

Smaller firms and individual advisers have also caused significant losses.

Dixon Advisory was penalised $7.2 million by the Federal Court in 2022 for steering clients into conflicted investments. The firm later collapsed, leaving more than 4,500 clients seeking compensation.

In an even larger ongoing matter, around 11,000 Australians invested approximately $1.1 billion into the Shield Master Fund and First Guardian Master Fund after receiving conflicted advice. Both funds have since collapsed, and ASIC is pursuing multiple parties through the Federal Court.

In many of these cases, people trusted financial professionals to protect their financial future and were left exposed instead.

You can fight back and it doesn't have to cost a fortune

After suffering losses, many people feel overwhelmed, embarrassed, or unsure where to turn. Others worry that taking on a financial institution will be too expensive or stressful.

But you do have options, and you don't have to face this alone.

Maurice Blackburn specialises in financial disputes and has helped thousands of Australians recover losses caused by misleading or negligent financial advice. Our lawyers can explain your options clearly and represent you if you decide to take action.

Your options for claiming compensation

The first step is usually to complain directly to your financial adviser and the firm they work for. If that doesn’t resolve the issue, you can take the complaint to the Australian Financial Complaints Authority (AFCA) or pursue a claim through the courts.

AFCA is less formal and lower cost, but:

• compensation is capped (currently to $631,500 for most direct loss claims)
• it cannot consider claims above $1,263,000

These monetary thresholds are subject to periodic adjustment. For the most current figures, check with AFCA.

Our financial services disputes team can explain your options clearly and give you an obligation-free assessment of the best path forward.

Experience that matters, when it matters most

When financial loss or uncertainty makes taking action feel overwhelming, we focus on easing the burden, guiding you through your options with clarity, care and determination.

If you’re concerned about losses caused by bad financial advice, contact us on 1800 111 222 to find out how we can help you recover what you’re entitled to.