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People turn to financial advisers to help them make the most out of their money and investments, and to safeguard the future and wellbeing of their family. Unfortunately, sometimes this advice can be wrong, misleading or negligent.

There are rules defining how financial advisers should deal with their clients, these include:


A financial adviser is required to:

  • know their client and their financial situation
  • know the financial product they are promoting
  • give appropriate advice
  • make statutory disclosures.


If you've received bad financial advice from a financial planner, financial adviser or broker, you may be entitled to compensation. 

How do I know if I am entitled to compensation?

You may be entitled to compensation if you have lost money or experienced financial hardship as a result of bad financial advice, such as:  

  • recommending a risky strategy that was not appropriate for someone in your circumstances
  • failing to do an adequate assessment of your circumstances, needs and objectives
  • failing to assess your tolerance for risk
  • failing to warn you of the risks associated with the investments and investment strategy
  • failing to monitor investments and respond to changing economic circumstances
  • failing to explain the interest payable on loans taken out to make investments
  • failing to diversify investments and spread risk across different sectors and industries
  • failing to recommend investments that pay high commissions to the adviser when other investments were more appropriate
  • 'churning': the process when too many trades are made, leading to high fees and commissions
  • failing to conduct an analysis to see how you're likely to be affected when markets fall
  • failing to disclose information and provide relevant documents, including a Financial Services Guide, Product Disclosure Statement, and Statements of Advice
  • advising you to take out loans which you could not afford
  • progressing with the investment when the recommendations and risks have not been fully explained and understood
  • recommending a strategy when you don't have a secure source of income or sufficient resources/cash flow to fund repayments for investment loans (without relying on income from the asset that is invested)
  • failing to implement the plan appropriately
  • failing to review and revise the plan at regular intervals.
     

What are my legal options if I've received bad financial advice?

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 Australian Financial Complaints Authority (AFCA).

There are advantages and disadvantages when going to AFCA or court, and there are important time limits for lodging disputes. Maurice Blackburn's experienced financial advice dispute lawyers can advise you about this and represent you in the formal complaint stage as well as at AFCA or in court.

Australian Financial Complaints Authority

Advantages

  • No fees are charged by AFCA
  • You don't have to pay the financial advisor's legal costs if you are unsuccessful.


Disadvantages

  • Disputes can take longer to resolve (currently 18 months to two years).
  • Settlements are less likely.
  • No compensation is received for indirect loss.
  • A $309,000 cap is set on the compensation payable.

Court

Advantages

  • No cap is set on compensation payable.
  • It is usually quicker than FOS.
  • Settlements are common.
  • Financial advisors can be compelled to provide relevant documents.
  • Discovery is compulsory.
  • Compensation for loss of opportunity can be awarded.


Disadvantages

  • It's expensive if you lose.
  • There is a risk of adverse costs orders.

Why should I have legal representation?

Receiving bad financial advice can have devastating consequences. Fighting a financial advice organisation and their insurer on your own is difficult, tedious, time-consuming and involves a lot of fine print and red tape.

Time limits also 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 you may have a legal case—and by working out your best course of legal action.

Get in contact today for an obligation-free first consultation. 

Cases,  investigations and compensation programs 

The banking and financial service sectors have come under close scrutiny in Australia. Unlawful or unethical conduct by financial service providers who provided poor investment and insurance guidance has resulted in losses, and poor lending practices by banks and mortgage brokers have left borrowers in financial hardship.

We are not just talking about small fringe operators – Australia’s big banks have too often put profits before people and have left a trail of devastated customers.

Some large banks who gave many customers poor financial advice have set up compensation review programs—including the Commonwealth Bank, Macquarie and NAB. We understand how these programs work, and we can guide you through every step of the process.

Learn more

In January 2018, the Australian Securities and Investment Commission (ASIC) published the results of a financial advice file review of the big 4 banks and AMP.

It revealed that three quarters of all financial advice provided by the big 4 banks and AMP was in breach of the law, particularly the duty to act in a customer’s best interests and the duty to provide appropriate advice.  

The report found that on average the big 4 banks and AMP recommended customers invest in in-house product almost 70% of the time and advice was more likely to be unlawful where advisers recommended an in-house product instead of an external product. 

An in-house product is a super fund, insurance policy, or other investment product that is owned by the same bank that the financial advisor works for.  This practice is sometimes called ‘vertical integration’ and it has led to devastating outcomes for thousands of Australians.

Advisors often lacked the knowledge to properly consider a customer’s existing financial product such as the existing super fund.

Conflicts of interest by advisors are not being appropriately managed – advisors are often incentivised to sell their bank’s products in preference to a perfectly good external product, without properly explaining the reasons to the customer.

You may have a legal claim for compensation if you received financial advice from an advisor affiliated with one of the following organisations:

  • AMP Limited (AMP)
  • Australia and New Zealand Banking Group Limited (ANZ)
  • Commonwealth Bank of Australia (CBA)
  • National Australia Bank Limited (NAB)
  • Westpac Banking Corporation (Westpac).


It’s not always clear whether you financial advisor is licenced through one of these companies because they often use different names.  If you’re not sure we can help you find out.

Read a summary of ASIC’s report.

If you think you might have received poor financial advice between 1 September 2003 and 1 July 2012 from Commonwealth Financial Planning or one of its associated entities, this review program may be able to help you get compensated for any financial losses.

Maurice Blackburn is acting as an Independent Customer Advocate, so we can give you advice and represent you during the review of your case. The Commonwealth Bank is paying for the Independent Customer Advocates, so you don't pay any fees to have Maurice Blackburn represent you.

Contact us today if you need representation. We will make sure your claim is dealt with properly and that you get the maximum compensation you deserve.

Update from Commonwealth bank

2015: On Thursday 29 January 2015, the Commonwealth Bank started to send about 350,000 letters to customers of Commonwealth Financial Planning Limited. The letters were sent to people who have product holdings through Commonwealth Financial Solutions and Financial Wisdom Limited, including Custom Solutions, CommInsure and CommSec, who received financial advice through Commonwealth Financial Planning Limited between 1 September 2003 and 1 July 2012.

The letter introduced the Commonwealth Bank Open Advice Review program, explained customers’ eligibility to participate in the program, and invited customers with concerns to contact them to find out more details. The letters were sent to deceased estates, individuals and business entities.

2017: In February 2017 it was confirmed that the CBA Open Advice Review program had completed all assessments for customers of Commonwealth Financial Planning Limited and Financial Wisdom Limited who had requested a review of their financial advice.

An appointed independent reviewer, Promontory Financial Group, reports on the program as it progresses. You can view their most recent report here.

Why Maurice Blackburn?

Maurice Blackburn has already acted for individuals with financial advice disputes against Commonwealth Financial Planning Limited and Financial Wisdom Limited and run a class action on behalf of financial planning customers of Don Nguyen. A Maurice Blackburn principal also gave evidence at the Senate Inquiry, which led to the CBA Open Advice Review Program being set up.

If you think you might have received poor financial advice between 2003 and 2012, contact us for independent legal advice about the CBA Open Advice Review program and your rights. Time limits apply so contact us as soon as possible.

Enquire today via CBAcompensation@mauriceblackburn.com.au or call 1800 614 451

Read more Information on the Commonwealth Bank of Australia potential class action

On 29 January 2013, the Australian Securities and Investment Commission (ASIC) announced it had accepted an Enforceable Undertaking from Macquarie Equities Ltd (MEL). ASIC is an independent Australian government body that acts as a corporate regulator and works to protect consumers, investors and creditors.

An investigation was carried out by ASIC that revealed serious and systemic problems with compliance at Macquarie Private Wealth, including cases in which Macquarie financial planning could not show a reasonable basis for the advice it had given out, and had failed to keep proper records for its clients.

Macquarie finance has since reached an agreement with ASIC to undertake an internal review; however, ASIC is not requesting that Macquarie's financial services audit every client's file, and there is no guarantee that Macquarie's internal review will find and compensate every client who received bad advice.

If you are a current or former client of Macquarie Private Wealth in any state or territory of Australia, and you think you've received poor financial advice from a planner resulting in bad performance by your investments, you should seek independent legal advice.

It is important to note that Macquarie's negligent record keeping may make it difficult for them to defend valid claims. Time limits apply so it is important to get proper advice soon. As ASIC conducts its investigations, you may be contacted by Macquarie finance or another entity about any investment advice received from its financial advisers.

Be aware that any information you give Macquarie Private Wealth or ASIC might be used against you if you decide to sue Macquarie finance. You should always get independent legal advice about how to respond to any requests for information.

Have you received financial advice from NAB since 2009? If so, you may be eligible to have your file reviewed through the process of the NAB’s Financial Advice Remediation program. Maurice Blackburn can provide independent legal advice to ensure you get the compensation you are entitled to.

Following a string of customer complaints against NAB’s financial planners, on 21 October 2015, the corporate regulator ASIC announced that an agreement had been reached with NAB (formerly National Australia Bank) whereby the bank will contact customers who may have received non-compliant financial advice since 2009.

What is the NAB Financial Advice Remediation program?

NAB has begun what they refer to as a "look back" process intended to identify customers who were negatively affected by advice provided by the bank. Clients identified by this process will have their files reviewed to determine if compensation should be paid.

NAB will also provide affected customers with financial assistance up to $5,000 plus GST to seek professional independent advice where appropriate.

Have you been affected by bad advice from NAB financial planners?

If you are a current or former client of NAB in any state or territory of Australia, who received what you believe to be poor financial advice from a planner and are unhappy with the performance of your investments, you should seek independent legal advice.

You also may have a claim even if you did not receive advice directly from NAB, but were advised by one of its subsidiaries:

  • MLC
  • NAB
  • JBWere
  • JANA
  • Plum
  • Apogee
  • Godfrey Pembroke (Financial Advice Specialists)
  • Garvan Financial Planning
  • Meritum


Get independent advice before accepting any offer

If you have been offered financial compensation by NAB, It is worth getting independent legal advice before accepting. When offers of financial compensation are made, it can be tempting to take the first offer and put the experience behind you. However, the first offer is almost never the best one, and some cases have seen up to seven reviews before settling on a final—and significantly higher—offer of compensation.

Contact us today to talk about what we can do to get you the compensation you deserve.

Have you received financial advice from Financial Circle to purchase insurance products or switching superannuation providers? If so, you may be eligible for compensation.

On 2 November 2018 the Federal Court of Australia ordered Financial Circle to pay civil penalties of $8,980,000 in total after it engaged in numerous contraventions of financial services, credit and consumer protection laws.  The Court found that in providing advice about purchasing personal insurance products and to switch superannuation providers, Financial Circle:

  • made false and misleading representations and engaged in misleading and deceptive conduct
  • engaged in unconscionable conduct
  • breached its licensee obligations under its Australian financial services licence (AFSL), including obligations requiring that it:
    • take reasonable steps to ensure that its authorised representatives act in clients’ best interests and provide advice that is appropriate
    • do all things necessary to ensure that the financial services covered by its AFSL were provided efficiently, honestly and fairly
  • engaged in a credit activity without a licence authorising it to engage in that activity.


Get independent advice before accepting any offer

You should get independent legal advice if you are contacted by Financial Circle about this or if you are offered financial compensating. It's best to get legal advice before accepting any offer.

When offers of financial compensation are made, it can be tempting to take the first offer and put the experience behind you. However, the first offer is almost never the best one, and in some cases up to seven reviews may be needed before settling on a final—and significantly higher—offer of compensation.

Contact us today to talk about what we can do to get you the compensation you deserve.

Our financial services dispute work

If you've received bad financial advice, we are here to help. Our specialist lawyers have helped our clients recover millions of dollars from negligent financial advisors. Find out if you have a claim today. 

It doesn't cost you anything to know where you stand 

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