My financial advisor gave me some advice recently that was obviously wrong. I've lost a lot of money. I've discussed the initial advice with other financial advisors since things went wrong and they are all very surprised that he said what he did. What can I do?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Neha Sharma, Hillsdale 2036 NSW
- Generally you will have three options that you can pursue against your financial advisor.
- Getting poor, misleading or negligent financial advice can lead to disastrous consequences. Financial advisers are professionals who are have a legal duty to provide their clients with a certain standard of care when providing professional services.
- You might like to:
- contact your financial adviser and make a formal complaint;
- make a complaint through the Financial Ombudsman Service; or
- lodge a professional negligence claim in court.
- The ombudsman may take a considerable time to resolve your dispute. It can take up to 2 years. There is also a $280,000 cap on compensation and you cannot claim for indirect loss.
- When you take a matter to court it may still be settled outside of court through preliminary mediation and negotiations. You may also claim for indirect loss such as loss of opportunity. However court processes can be quite expensive and if you lose you may be asked to pay the other party’s costs.
- You should speak to a lawyer as soon as possible regarding the legal avenues available to you. Strict time limits apply to financial advice professional negligence cases.