Bad Financial Advice

While there are many good financial advisors who guide their clients wisely, there are also examples of bad financial advice in which the advisor has counselled their client toward risky investments, or into a general investment strategy where there is too much focus on one particular kind of investment with a resulting risk of losses of capital or income.

It might be that the advisor encourages the client to qualify as a sophisticated investor with the promise of opportunities which are superior to those available to ordinary investors, but without telling the client that a sophisticated investor does not receive the same level of disclosure as an ordinary investor.

Quite apart from the complaints process (including taking the matter to the financial ombudsman service), customers who have received bad financial advice may be entitled to claim damages for negligence, breach of contract, or misleading conduct.  There are however time limits which apply in relation to the court claims for damages, those time limits generally  being six years from the date of the breach which led to the loss, or six years from the date that the loss is incurred, depending upon the nature of the claim.  It can be difficult to ascertain the date that the loss is incurred, however to be safe, it is best to proceed on the basis that the loss is incurred when the customer is committed to making the investment.

the result of that is that – with many losses from bad financial advice going relatively undetected for some years – it is very important to act quickly if you believe that you have a claim, and when putting together your material to instruct lawyers in relation to a claim, focus on the advice received at the outset and the documents relied on to make the investment.

For enquiries relating to claims arising from bad financial advice, please contact Peter Muller at peterm@qbmlaw.com.au or Justin Mathews at justinm@qbmlaw.com.au