What to do if you've received bad financial advice
At Maurice Blackburn, we fight for fair. We've helped our clients successfully recover millions of dollars from negligent financial advisors, through courts, tribunals and compensation programs.
Since the devastating effects of the global financial crisis, some large banks who gave many customers poor 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.
We believe that despite a string of scandals in the financial services industry, there still remains a profits-before-people culture within the industry. That's why we support a Royal Commission to clean up the industry—once and for all.
Why Maurice Blackburn?
Maurice Blackburn's financial advice disputes lawyers are experts in the field. We fight for fair, and we can help you to get the settlement you deserve.
We offer 'no win, no fee'* arrangements for these types of cases, which means that you don’t have to pay for our legal services if we don't win.
All you need to know about financial advice disputes
Have you been given wrong, misleading or negligent advice from financial planners, brokers or financial advisors? We can help you recover what’s rightfully yours.
Frequently Asked Questions
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.
Maurice Blackburn can help you understand 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 you may have a legal case—and by working out your best course of legal action.
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. 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 FOS or in court.
Financial Ombudsman Service
- No fees are charged by FOS.
- You don't have to pay the financial advisor's legal costs if you are unsuccessful.
- 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.
- 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.
- It's expensive if you lose.
- There is a risk of adverse costs orders.
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.
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:
- a need for regular income (eg retirement income)
- a need for capital growth
- a desire to minimise fees and costs
- tolerance for the risk of capital loss, especially if it is significantly possible if the advice is followed
- tolerance for the risk that the advice (if followed) will not produce the expected benefits
- an existing investment portfolio
- a need to be able to quickly cash-in the investment
- a capacity to service any loan provided in relation to a financial product
- your tax position
- your social security entitlements
- your family commitments
- your employment security
- your expected retirement age.
You can sue your financial adviser for 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.
Maurice Blackburn has the largest superannuation, insurance and financial advice claims department in Australia. Our lawyers understand your needs, and have the expertise to back it up and recover what's rightfully yours.
Our team of experts help everyone, from professionals and self-funded retirees to mum and dad investors. We understand that in this industry investors put their trust in the expertise of financial advisers and really put their lives and futures in their advisers' hands.
Maurice Blackburn can represent you on a 'no win, no fee'* basis in group actions and individual claims. This means you only have to pay our legal fees if your case is successful.
Maurice Blackburn's financial advice disputes lawyers have acted for clients against companies such as Commonwealth Financial Planning Ltd, Financial Wisdom, the Macquarie Group, NAB, Citigroup, Morgan Stanley and Wealthsure.
We recently helped a single mother recover damages after she was advised to set up a self-managed superannuation fund and borrow to invest in a residential property that she could not rent out and was forced to sell at a loss.
We've helped many retirees who were advised to invest their life savings/superannuation in high risk, speculative investments through which—unfortunately—they lost most of their life savings.
No. Maurice Blackburn's financial advice lawyers will act for you on a 'no win, no fee'* basis. There is no charge for advice or for the first appointment if you do not win, or if you decide at this point that you do not want us to represent you.