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LAWYER HELPLINE: 1800 455 886

We only deal with losses incurred as a result of negligent financial advice given by banks, financial institutions, advisors and wealth management companies.

Solicitors compensation claims for financial advisor professional negligence usually relates to either breach of fiduciary duty or breach of contact. A financial advisor is expected to exercise reasonable skill and care in their duties on behalf of those with whom they have fiduciary or contractual relationships. Failure to exercise reasonable skill and care which results in financial losses may mean that the clients solicitor has the right to claim compensation and damages based in the negligent behaviour.

The fiduciary relationship which often exists between an investor and a financial advisor is frequently one of total dependence due to most investors having little or no knowledge of how the financial investment system operates. Most clients blindly follow the advice given to then which places a very high degree of responsibility onto the financial advisor.

Failure to exercise a reasonable degree of skill and care can result in legal action by a financial advisor professional negligence solicitor for all losses sustained by a client. If however the client is less than naive in regards to financial matters it must be shown that he actually did place reliance on the advice before making the investment. Where there is erroneous advice but no reliance on that advice there is no possibility of financial advisor professional negligence being proved.

If you would like initial advice at no cost from professional negligence solicitors on whether or not you have a viable legal claim against a negligent financial advisor just call the helpline. We will take full details and advise you in the clearest of terms whether or not we believe that you have a valid claim for compensation and the value of damages likely to be awarded. If after speaking to our financial advisor professional negligence solicitor you decide to go no further, you will not be charged for any advice.

Duty of Care

The duty of care to the client in these matters extends to a prohibition on non-disclosure, conflicts of interest, secret profits and unjust enrichment. Breach of any of these is a breach of fiduciary duty and probably also a breach of contact enabling the client to take legal action to claim compensation for the financial advisors professional negligence. Other conduct that may amount to negligence includes failure to :-

  • assess personal needs & finances
  • assess a reasonable figure for investment
  • council against unsuitable investments
  • warn of potential high risk investment
  • advise on all incumbent risk of a particular investment
  • advise on the brokers contra interest
  • take independent advice where appropriate

Negligent Financial Advisors

It must be stated from the very beginning that not all professional financial advice that results in monetary loss can be considered to be negligent. The mere fact that an investment recommended by a financial advisor, planner, consultant or stockbroker does not perform as anticipated does not necessarily mean that a profession financial consultant has been negligent in making that recommendation. Disputes of less than $150,000 may be resolved by the Financial Ombudsman Service (FOS) whilst figures in excess of this sum must be dealt with by mediation, negotiation or litigation. The issue of negligence by a financial advisor relating to investment advice can be a complex legal matter which requires skilled legal advice from a qualified professional negligence lawyer.

Negligence Law

The ordinary law of negligence applies to fund managers, superannuation trustees, managers & promoters of managed investment schemes, banks, financial institutions, stockbrokers or financial planners & advisors. This means that provided the consultant owes you a duty of care which will be in existence in most commercial relationships and you rely on any advice that has been given to your detriment, you will be entitled to claim compensation for direct loss that is reasonably foreseeable if the advisor failed to exercise reasonable skill & care. Conduct that may contribute to a finding of negligence includes failure to :-

  • fully consider personal needs and finances
  • make a reasonable assessment of the figure for investment
  • advise against unsuitable investments
  • assess investors attitude to risk
  • warn of high risk investment
  • advise on potential risk of an investment
  • advise on the brokers or advisors contra interest
  • take independent advice from another consultant where appropriate

Securities and Investments Commission

To practice as a financial advisor, planner or consultant in Australia in common with most other developed countries it is necessary to be registered by the Australian Securities and Investments Commission (ASIC) which will grant an Australian Financial Services Licence (AFSL) to a suitable investment advisor who complies with strict criteria thereby entitling that person to deal in securities or to give advice on investments. There are over 4,000 AFSL holders in Australia represented by over 40,000 fully trained and authorised representatives.

Duties & Responsibilities

A licensed financial advisor is required by law to be totally honest and upfront in their dealings with the public. They must provide a financial services guide in writing which sets out information about the complaints procedure, how they get paid and what relationships they may have with the companies they recommend for investment. A financial advisor will usually enter into a fiduciary relationship with a client and will be expected to always act in the clients best interests. They must therefore recommend investments that are best for the client rather than investments that are best for then in terms of commissions or bonuses.

Statutory Provisions

Those who recommend investments are subject to legislation contained in the ASIC Act and the Corporations Act which impose obligations on financial advisors who must :-

  • not engage in unconscionable or misleading or deceptive conduct
  • not make false or misleading statements that cannot be verified
  • provide their services with 'due care and skill'
  • provide their services efficiently, fairly and honestly
  • have a reasonable basis for the advice that they give you
  • provide relevant documents including a financial services guide and written advice

Negotiated Settlement

Our professional negligence lawyers initially attempt to obtain settlement on an agreed basis however, once a formal letter of claim has been received by the potential defendant the matter is usually referred on to professional indemnity insurers who thereafter instruct solicitors to act on their behalf. Some insurers will enter into negotiations, however in the event that there is an intimation that legal proceedings will or are likely to be issued in a court of law, the entire matter will be passed on to solicitors. It should be recognised that insurers often use the same panel solicitors for the bulk of their professional negligence work and as such those solicitors that receive regular referrals are often experts with vast experience. It is therefore to your advantage to be similarly represented and to instruct equally qualified professional negligence lawyers to act on your behalf.

Professional Negligence Solicitors

The work carried out by a professional negligence lawyer involves claiming compensation for negligent advice or for unsatisfactory work carried out by professionally qualified people including fund managers, superannuation trustees, managers & promoters of managed investment schemes, banks, financial institutions, stockbrokers or financial planners & advisors. A solicitors professional negligence claim often involves complex legal issues which, due to the fact that most qualified people are indemnified by a policy of insurance, results in their insurers instructing professional negligence solicitors of the highest calibre to defend any compensation claim that may be intimated against their insured. Fund managers, superannuation trustees, managers & promoters of managed investment schemes, banks, financial institutions, stockbrokers or financial planners & advisors are never going to be a pushover when it comes to legal proceedings for professional negligence. They are usually intelligent, educated and articulate and its definitely to your advantage to be represented by an expert lawyer, well versed on dealing with defended professional negligence claims when coming up against a negligent financial advisor.

We only deal with losses incurred as a result of negligent financial advice given by banks, financial institutions, advisors and wealth management companies.

HELPLINE: 1800 455 886


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