# Suing a financial advisor



## dupedbyadvisor

I'd like to open a topic about the type of action we can take against a Financial advisor who failed to follow instructions. My advisor put me into long term investments when I clearly asked for short term in Oct 2007. Then gave misleading information such as "the market will recover in a few months"...don't cash it in. No such information should be given. 
I've lost over $190,000 (and currently not employed). The financial ombudsman cannot do anything for losses over $100,000. 

So I'm taking measures to sue him. Has anyone taken this step? Any advice?


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## Julia

I'm sorry to hear of your situation.

Do you have a written record of your instructions to the adviser?


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## Garpal Gumnut

dupedbyadvisor said:


> I'd like to open a topic about the type of action we can take against a Financial advisor who failed to follow instructions. My advisor put me into long term investments when I clearly asked for short term in Oct 2007. Then gave misleading information such as "the market will recover in a few months"...don't cash it in. No such information should be given.
> I've lost over $190,000 (and currently not employed). The financial ombudsman cannot do anything for losses over $100,000.
> 
> So I'm taking measures to sue him. Has anyone taken this step? Any advice?




Contact a non fee, no win no fee solicitor.Check the Storm financial thread on this forum for details.

gg


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## skyQuake

You can have free consultations with solicitors, and see if you have a cause for action (judging from the limited facts you most likely do if you have stuff on paper).

A smaller or mid tier law firm should do, no point wasting money on Mallesons or CBP for a case like this.

DYOR


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## GumbyLearner

Garpal Gumnut said:


> Contact a non fee, no win no fee solicitor.Check the Storm financial thread on this forum for details.
> 
> gg




*My advisor put me* into..

Oh really ?

So what coaxed you to believe in him in the first place?


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## Sir Osisofliver

dupedbyadvisor said:


> I'd like to open a topic about the type of action we can take against a Financial advisor who failed to follow instructions. *My advisor put me into long term investments when I clearly asked for short term in Oct 2007*. Then gave misleading information such as "the market will recover in a few months"...don't cash it in. No such information should be given.
> I've lost over $190,000 (and currently not employed). The financial ombudsman cannot do anything for losses over $100,000.
> 
> So I'm taking measures to sue him. Has anyone taken this step? Any advice?




Duped,

I'm sorry to hear of your predicament.  That said, I have said it before and I will say it again...you should never cede control of your investments to someone with a conflict of interest.

Of course the FP would say don't cash it in - how's he expected to get a trailing commission if you don't have your money invested *all the time?*

It's pretty much SOP for the larger FP firms to have acknowedgement forms that they get clients to sign before commencing investment.  If you have signed one of these documents - you are probably completely out of luck.  If you haven't signed one of those forms designed by flesh eating lawyers, what *do *you have in writing?  If he's placed you into managed funds (which is highly likely), you would have needed to sign some  documentation for that...once again you would be out of luck there.

As for his assertion that the market would recover in a couple of months...when exactly did he make this assertion?  It was a widely held belief in the industry in January that the market was merely having a dip and he could make a case that the information he had at hand at the time lead him to the conclusion that the negativity was short-term and the market would bounce.

If you do have written instructions that you passed onto you FP about investing in short-term and he actualy has acted without your signatures or instruction in placing you into these long term investments you may have a chance.

Personally, from the information you've given - sounds like you are without much of a chance in recouping the money from his professional indemnity insurance. 

Cheers 
Sir O


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## tech/a

Good money chacing bad in my view.

If its not in writing its hear say.
Even if it was whats the difference (Or mitigated loss) had the instruction been followed.
Whats it in now?
Why did you not demand alteration to your longterm investments well before now--IN WRITING.

If you have a string of requests to alter investment and a string of letters from the F/P telling you to hold---then you may well have a case.

The less you have in writing the less you have in a case---any case!


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## numbercruncher

Sounds like yet another criminal " financial advisor " - good luck which ever avenue you choose.


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## metric

financial advisers are no more than used car salesmen, and know even less about their products.

im sorry you got involved with such petty gangsters. its a lesson for everyone.

go to a 'no win no pay' solicitor. if they win you pay no more than half your winnings.....you pay nothing if you lose. they wont take the case if they think they will lose....

you will need some evidence to support your claim. word of mouth usually counts for not much.....


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## startrader

Duped,

If your financial advisor put your money into long term investments in 2007 instead of short term and when you tried to retrieve the money he told you that "the market will recover in a few months" I would say that he honestly believed that it would recover in a few months.  The financial industry has been completely clueless about this whole financial crisis and, regardless, if the market had recovered you would be happily sitting here not threatening to sue.  You obviously made the decision at the time not to push it and leave your money there and see what happened.

I would say you wouldn't have a leg to stand on and you should really be taking some responsibility for what happened instead of trying to deal with a very unpleasant situation by putting all the blame on someone else.


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## prawn_86

startrader said:


> I would say you wouldn't have a leg to stand on and you should really be taking some responsibility for what happened instead of trying to deal with a very unpleasant situation by putting all the blame on someone else.




Agreed.

Did you want to sue him when you had made money?

Every product comes with 'buyer beware' so its either up to you to educate yourself, or to shop around to find an advisor you trust and who has a good track record. Take responsibility for your actions (or lack of) and look to the future to see how you can avoid the same mistakes in the future.


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## cuttlefish

To me it depends.

I don't know what 'dupedbyadvisor's scenario is, but lets say someone sold a house, planned to buy another one in 12 to 18 months time and wanted the cash invested over that 12 to 18 month period.  

They're not financially savvy so they go to a financial advisor and say:  "I've got X hundred thousand, I'd like it invested in short term investments, I'll be wanting the cash back in around 12 to 18 months time".

If the financial advisor then placed the money into a majority equity portfolio they have not acted according to the advice.   Short term would be possibly a small equity component but predominately a mixture of interest bearing products (I'm assuming - I'm not an FA).

The other factor is whether they wanted the capital guaranteed or not or how much capital protection they wanted and whether they expressed this.

By the sounds of some of the previous comments by Sir O in other threads - the financial industry is already heavily regulated - I'm assuming it is regulated enough that these two simple criteria should be documented somewhere in the original engagement process.  

If so then you'd hope its possible to take some sort of action if the clear instructions weren't followed.


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## metric

dupedbyadvisor said:


> failed to follow instructions. My advisor put me into long term investments when I clearly asked for short term in Oct 2007.




at what point did you realise that ? have you any evidence that he failed to follow instructions.?

others here who are saying 'bad luck' musnt believe their instructions to their broker is worth crap either......? so if your broker doesnt sell when you tell him...its bad luck??? lol


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## cuttlefish

Just read Sir O's comments above in this thread again - regardless of what unfolded verbally, and the fairness or otherwise of it all, it sounds like the FA's will be well protected against this sort of action.


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## dette

I'd wonder if it would be worth approaching FOS with a limit on your claim to $100K, or if there are separate claims for separate incidents each with a limit of up to $100K which might allow you to reach the $190K you believe you have lost.

They have a different standard of proof to the traditional legal system as I understand it and may be more inclined to review whether what has taken place is "reasonable" rather than technically allowable.

Might be worth finding a "compliance specialist" to discuss your situation.


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## watsonc

dupedbyadvisor said:


> I'd like to open a topic about the type of action we can take against a Financial advisor who failed to follow instructions. My advisor put me into long term investments when I clearly asked for short term in Oct 2007. Then gave misleading information such as "the market will recover in a few months"...don't cash it in. No such information should be given.
> I've lost over $190,000 (and currently not employed). The financial ombudsman cannot do anything for losses over $100,000.
> 
> So I'm taking measures to sue him. Has anyone taken this step? Any advice?




I work in compliance, vetting and complaints for a large financial institution at Circular Quay - Sydney. The financial advisor should have completed a Fact Finder (FF) document, as well as additional file notes regarding your situation and needs. For the advisor to recommend managed investments (as well as possible gearing) the investment sections of the FF, as well as the risk profile questionnaire section MUST be completed.

The FF should have documented what "risk" you were prepared to take e.g. conservative through to Aggressive, and the time frame you were prepared to invest.  More aggressive investments are only recommended for longer periods of time i.e. 5-10 years. So if the FF clearly indicates that you only had a short time frame to invest, as well as a lower tolerance to risk - the financial planner may be liable.

Please note that financial planners are not permitted to second guess the market, and cannot make recommendations to cash in investments if they simply feel that the market is going to tank. Ideally a financial planner will recommend a 5 year investment, and then review your situation after 5 years.

Please note that gearing investment recommendations MUST be reviewed by the planner anually.

Please also note that with gearing plans, other guidelines must be adhered to i.e. debt to asset ratio, 2% rule (cash flow), the Statement of advice (SOA) must also clearly document an exit strategy and demonstrate a "reasonable basis for the advice".

Compliance can be a really grey area. But I hope this helps.
If you think the planner's documentation and SOA would support your claims, your best bet in this case would be to lodge a complaint with planner through your solicitor. Planners will generally be a bit more co-operative once they no you are serious. Planners also must carry Professional Indemnity insurance through CGU. If your claim is legitimate, CGU will pay the damages.


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## Glen48

A mates Accountant told him to sell a house in to his Super then the ATO tried to tax him on the deal he found out he can't do that and is suing his account and look like he has a case..but this one has a paper trail....just shows how hard it is getting to survive these days I now sleep like a Baby , sleep for 2 hours cry and go back to sleep could be worse if we didn't have Rudd at the Wheel.


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## Jack Payback

If you want to make a complaint, you need to go to FICS - the Financial Industry Complaints Service - all advisers that operate under a Financial Services License have to be a member of this organisation. It is a dispute resolution service regulated by ASIC. 

As the last contributor stated, the adviser must undertake research to ensure the investment is within your risk profile and goals, otherwise they have breached the FSRA and Corporations Act and you have a case.

You are much better off by seeing a fee for service adviser, particularly who does not take commissions or rebates them back to you. A good adviser would have told you to keep your cash in a high interest bank account for short terms and not charged anything, most advisers like to avoid the possibility of complaints such as these, let alone the licensee.


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## dupedbyadvisor

Thanks, really appreciate everyones views. Just to clarify more information for a few who’ve asked…

The FP did place me into managed funds with investments in property (APN property, RREEF Paladin Property and SG Hiscock Listed Property). Other assets in the portfolio he put my money into are Perpetual Industrial, ING, Lazard, Schroder,, etc. 

I’m unemployed and it’s cost me $2,000 in lawyer fees for one consult, a letter to the FP and a few phone calls. 

Unfortunately I don’t have a written record of my instructions to the advisor, it was all by word of mouth.  I do however have notes from 2 previous advisors I’ve seen. They’ve both stated my short term objectives on record.  With regards to the FP in question, there is no much paper work suggesting “short term”. I made the mistake of “trusting” he would be doing the right thing. I knew little, if anything about what the “assets” were about and he knew it!!! I believe he took advantage of my lack of knowledge. 

_What coaxed me to believe in him? _Because he is licensed and has been an FP for nearly 20 yrs. He seemed to know his stuff….*but in hindsite it was all an elaborate ploy to depart me from my cash. *

_When did I first realize he had placed me into long term investments? _When I received my first statement in February 2008 and noticed a $60,000 loss. 

The FP made the assertion that stocks would rise in another few months (he made this claim in late February 2008). By then I had only lost $60,000… now it’s climbed to over $180,000 loss. No…he should NOT have made such an assumption. This is nothing less than gambling peoples money away. 

Before I signed anything with the FP, I do recall a meeting where I noticed a few “longer term” assets on the SoA. Some were international shares that wouldn’t show profit for 4 years. I set up a meeting with him and got him to change the portfolio around to closer match a “short term” investor. I saw him shift a few things around and he announced it’s “geared for a short term investor”. Unfortunately he didn’t do that at all. Perhaps he didn’t expect such a financial disaster was close ahead?? *He relied on the “long term investments” he had placed me into to perform well. *

I have complained to FICS and ASIC. They referred me to FOS who now have dropped my case since it’s passed the $100,000 loss limit. During the complaints period we obtained my FP’s notes and I cannot see where he has documented my meeting with him (prior to me signing the SoA) to adjust it to a more “short term investment” strategy. He had omitted it from his notes. 

*Where does that leave me*? _They suck us in, use our lack of knowledge against us, give misleading information and are protected by the law via signatures whilst they gamble with our hard earned money. _

Thanks dette your idea on breaking my complaint into a few small ones to get around the FOS limit of $100,000 is certainly worth looking into. 

Watsonc - you work in compliance, vetting and complaints? where do I find such a service?…and I wasn’t too clear with your last sentence. I already have had my FP served with a “letter of demand” by my lawyer, the FP responded by putting the matter into the hands of his indemnity insurance. We haven’t heard from his insurance yet.


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## James Austin

dont mean to be rude,
but was this a case of easy come, easy go?

if you had worked your butt off for that cash, would you have let it slip away so easily? just curious!

alternatively, were you a little starry-eyed?

not suggesting its your fault,
if you are entitle to recompense, best of luck to you.


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## Garpal Gumnut

dupedbyadvisor said:


> Thanks, really appreciate everyones views. Just to clarify more information for a few who’ve asked…
> 
> The FP did place me into managed funds with investments in property (APN property, RREEF Paladin Property and SG Hiscock Listed Property). Other assets in the portfolio he put my money into are Perpetual Industrial, ING, Lazard, Schroder,, etc.
> 
> I’m unemployed and it’s cost me $2,000 in lawyer fees for one consult, a letter to the FP and a few phone calls.
> 
> Unfortunately I don’t have a written record of my instructions to the advisor, it was all by word of mouth.  I do however have notes from 2 previous advisors I’ve seen. They’ve both stated my short term objectives on record.  With regards to the FP in question, there is no much paper work suggesting “short term”. I made the mistake of “trusting” he would be doing the right thing. I knew little, if anything about what the “assets” were about and he knew it!!! I believe he took advantage of my lack of knowledge.
> 
> _What coaxed me to believe in him? _Because he is licensed and has been an FP for nearly 20 yrs. He seemed to know his stuff….*but in hindsite it was all an elaborate ploy to depart me from my cash. *
> 
> _When did I first realize he had placed me into long term investments? _When I received my first statement in February 2008 and noticed a $60,000 loss.
> 
> The FP made the assertion that stocks would rise in another few months (he made this claim in late February 2008). By then I had only lost $60,000… now it’s climbed to over $180,000 loss. No…he should NOT have made such an assumption. This is nothing less than gambling peoples money away.
> 
> Before I signed anything with the FP, I do recall a meeting where I noticed a few “longer term” assets on the SoA. Some were international shares that wouldn’t show profit for 4 years. I set up a meeting with him and got him to change the portfolio around to closer match a “short term” investor. I saw him shift a few things around and he announced it’s “geared for a short term investor”. Unfortunately he didn’t do that at all. Perhaps he didn’t expect such a financial disaster was close ahead?? *He relied on the “long term investments” he had placed me into to perform well. *
> 
> I have complained to FICS and ASIC. They referred me to FOS who now have dropped my case since it’s passed the $100,000 loss limit. During the complaints period we obtained my FP’s notes and I cannot see where he has documented my meeting with him (prior to me signing the SoA) to adjust it to a more “short term investment” strategy. He had omitted it from his notes.
> 
> *Where does that leave me*? _They suck us in, use our lack of knowledge against us, give misleading information and are protected by the law via signatures whilst they gamble with our hard earned money. _
> 
> Thanks dette your idea on breaking my complaint into a few small ones to get around the FOS limit of $100,000 is certainly worth looking into.
> 
> Watsonc - you work in compliance, vetting and complaints? where do I find such a service?…and I wasn’t too clear with your last sentence. I already have had my FP served with a “letter of demand” by my lawyer, the FP responded by putting the matter into the hands of his indemnity insurance. We haven’t heard from his insurance yet.




Mate you have been had.

There is no recourse to your losses.

Move on.

Spread the word that the Financial Advice Industry is a scam with ethics below that of Used Car Salesmen.

Sorry to be so harsh, but you've been a mug and been taken.

Get over it and move on.

gg


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## ROE

Without some concrete evident, you don't stand a chance in court, your word against his and lawyers will suck you dry with another 40 - 50K or more.

Best to forget it and move on.. I know it's tough with such large amount of money but if you fight on it takes a toll on you, your family and more money and you may not get anything back.

Learn to manage your own money and if someone promise some crazy return like 20% a year... use this lesson and walk away.


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## 1080p

Did you sign the SoA as well as an 'Authority to Proceed' document?  The latter would insulate the FP fairly well unfortunately...


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## Julia

James Austin said:


> dont mean to be rude,
> but was this a case of easy come, easy go?
> 
> if you had worked your butt off for that cash, would you have let it slip away so easily? just curious!



Whoa, that's a bit harsh, isn't it?   How do you know he didn't, as you put it, work his butt off for that money?   I can't see anywhere that he has stated that the funds were "easy come".

Duped, it seems your basic error was in not having everything documented in writing.  Obviously this is something you won't do again.  Meantime, you're down a significant amount, and I'm sorry about that.  It must be particularly difficult given that you're presently unemployed.  You should be able to trust F.A.'s but sadly you can't in many cases.

Imo the rule about the FOS only pursuing claims of not more than $100K is unreasonable.  However, that's how it is apparently, so the suggestion made to adjust your claim to two smaller claims makes sense.

I hope something may positively come out of this.  I don't think you should give up too easily.  Best of luck.


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## James Austin

dupedbyadvisor said:


> Then gave misleading information such as "the market will recover in a few months"...don't cash it in.






dupedbyadvisor said:


> _What coaxed me to believe in him? _Because he is licensed and has been an FP for nearly 20 yrs. He seemed to know his stuff….*but in hindsite it was all an elaborate ploy to depart me from my cash. *
> 
> _When did I first realize he had placed me into long term investments? _When I received my first statement in February 2008 and noticed a $60,000 loss.
> 
> The FP made the assertion that stocks would rise in another few months (he made this claim in late February 2008). By then I had only lost $60,000… now it’s climbed to over $180,000 loss. No…he should NOT have made such an assumption. This is nothing less than gambling peoples money away.







Julia said:


> Whoa, that's a bit harsh, isn't it?   How do you know he didn't, as you put it, work his butt off for that money?   I can't see anywhere that he has stated that the funds were "easy come".
> 
> Duped, it seems your basic error was in not having everything documented in writing.





Not critical of the fellow, just curious as to how he came to hand over the cash. 

However, the above comments by duped suggest a lack of research. He had a license so I gave him $190grand. . . . What??

But by that I’m not implying the FP has the right to defraud him, if he has done that. If he can get his money back then I hope he does.


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## Garpal Gumnut

Listen up you guys and gals.

Garpal decides to become a financial adviser.

The FIRST thing I am going to do is ensure that if everything goes pear shaped my good wife and children will not be compromised.

I put the house, the boat and anything of value in her name.

I form a limited liability company.

I then engage a young lady who is smart and presentable to be my pa , receptionist, I lease an office in the company name, oh by the way I've gotten a dodgy financial planners license along the way, not difficult, and the I work out a marketing plan.

I ally myself with some accountants, use my contacts in business to generate throughflow, etc etc.

Ensure that my office has karma, swimming fish, fountains etc etc.

And now I am in business.

Any profits get sent over to my wife and children to ensure that if it goes pearshaped our assets are protected.

When you , you poor mug realise that my decisions have left you broke.

TOUGH

I wind up my company and start again.

You cannot sue my wife.

You can sue my company but its broke.

TOUGH

Perfick.

gg


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## watsonc

1080p said:


> Did you sign the SoA as well as an 'Authority to Proceed' document?  The latter would insulate the FP fairly well unfortunately...




Even if the SOA, and authority to proceed has been signed - that does not mean the planner is insulated. The SOA may not constitute a "reasonable basis for advice". e.g. the SOA must attempt to meet the client's goals and objectives. If the client has expressed a need for short-term investments, and the SOA recommends long-term styled investments (e.g. an agricultural product which matures in 10 years - that would not be appropriate advice!)
Thus the advisor would not be insulated if what s/he was recommending were not appropriate to the client's situation.

ALSO - If there is a lack of paper work (trail) - the planner is not doing their job properly. ALL conversations, etc must be recorded.  Poorly detailed and un-measureable goals need to be discussed, ellaborated on, and recorded. If this is not done - this would result in a compliance breach where I am currently working.


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## Garpal Gumnut

watsonc said:


> Even if the SOA, and authority to proceed has been signed - that does not mean the planner is insulated. The SOA may not constitute a "reasonable basis for advice". e.g. the SOA must attempt to meet the client's goals and objectives. If the client has expressed a need for short-term investments, and the SOA recommends long-term styled investments (e.g. an agricultural product which matures in 10 years - that would not be appropriate advice!)
> Thus the advisor would not be insulated if what s/he was recommending were not appropriate to the client's situation.
> 
> ALSO - If there is a lack of paper work (trail) - the planner is not doing their job properly. ALL conversations, etc must be recorded.  Poorly detailed and un-measureable goals need to be discussed, ellaborated on, and recorded. If this is not done - this would result in a compliance breach where I am currently working.






Garpal Gumnut said:


> Listen up you guys and gals.
> 
> Garpal decides to become a financial adviser.
> 
> The FIRST thing I am going to do is ensure that if everything goes pear shaped my good wife and children will not be compromised.
> 
> I put the house, the boat and anything of value in her name.
> 
> I form a limited liability company.
> 
> I then engage a young lady who is smart and presentable to be my pa , receptionist, I lease an office in the company name, oh by the way I've gotten a dodgy financial planners license along the way, not difficult, and the I work out a marketing plan.
> 
> I ally myself with some accountants, use my contacts in business to generate throughflow, etc etc.
> 
> Ensure that my office has karma, swimming fish, fountains etc etc.
> 
> And now I am in business.
> 
> Any profits get sent over to my wife and children to ensure that if it goes pearshaped our assets are protected.
> 
> When you , you poor mug realise that my decisions have left you broke.
> 
> TOUGH
> 
> I wind up my company and start again.
> 
> You cannot sue my wife.
> 
> You can sue my company but its broke.
> 
> TOUGH
> 
> Perfick.
> 
> gg




Get real mate.

We live in the real world.

All these acronyms matter sfa unless you can get your dough back.

gg


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## dupedbyadvisor

watsonc said:


> Even if the SOA, and authority to proceed has been signed - that does not mean the planner is insulated. The SOA may not constitute a "reasonable basis for advice". e.g. the SOA must attempt to meet the client's goals and objectives. If the client has expressed a need for short-term investments, and the SOA recommends long-term styled investments (e.g. an agricultural product which matures in 10 years - that would not be appropriate advice!)
> Thus the advisor would not be insulated if what s/he was recommending were not appropriate to the client's situation.
> 
> ALSO - If there is a lack of paper work (trail) - the planner is not doing their job properly. ALL conversations, etc must be recorded.  Poorly detailed and un-measureable goals need to be discussed, ellaborated on, and recorded. If this is not done - this would result in a compliance breach where I am currently working.





Hi watsonc... could you please send a pvt message of where you work or a similar company/contact ??


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## Garpal Gumnut

dupedbyadvisor said:


> Hi watsonc... could you please send a pvt message of where you work or a similar company/contact ??




You'd be better off going to the video store and hiring out "The Castle"

The financial advisers have totally insulated themselves against any comeback by getting the mugs to sign all sorts of disclaimers. 

Its "The Vibe" in reverse.

gg


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## dette

There seems to be a bit of commentary suggesting that you can’t win anyway and that you would be better off giving up on your claim.

Please don’t.

Where there have been compliance breaches you have a reasonable chance of making a claim at FOS at least.  As you may already know, the service won’t cost you, and their decision is not binding on you, but is binding on the FP.  Each individual event may be deemed a separate breach with separate associated costs – seek advice.

Also, don’t forget about ASIC, ASX and ACCC where there have been compliance breaches that may cross their jurisdictions.  It might be another avenue of clarification of your situation for you, but again is best navigated with a compliance specialist.

None of us should find it acceptable that FPs should be able to avoid the standards of compliance set for them as a minimum.  The average person cannot be expected to have the same level of knowledge and does place such a substantial amount of trust in these advisers that can have such a massive impact on the investor.  If we were to all say “oh, you have no chance mate, forget it and move on”, I would be concerned that that would be tantamount to offering FPs free reign.

Don’t we want a better standard of performance from FPs in our community?

Best wishes with your claim.


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## Dowdy

The best Financial Advisor is yourself.

That and alot of research


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## Julia

dette said:


> There seems to be a bit of commentary suggesting that you can’t win anyway and that you would be better off giving up on your claim.
> 
> Please don’t.
> 
> Where there have been compliance breaches you have a reasonable chance of making a claim at FOS at least.  As you may already know, the service won’t cost you, and their decision is not binding on you, but is binding on the FP.  Each individual event may be deemed a separate breach with separate associated costs – seek advice.
> 
> Also, don’t forget about ASIC, ASX and ACCC where there have been compliance breaches that may cross their jurisdictions.  It might be another avenue of clarification of your situation for you, but again is best navigated with a compliance specialist.
> 
> None of us should find it acceptable that FPs should be able to avoid the standards of compliance set for them as a minimum.  The average person cannot be expected to have the same level of knowledge and does place such a substantial amount of trust in these advisers that can have such a massive impact on the investor.  If we were to all say “oh, you have no chance mate, forget it and move on”, I would be concerned that that would be tantamount to offering FPs free reign.
> 
> Don’t we want a better standard of performance from FPs in our community?
> 
> Best wishes with your claim.



I agree with this.   We seem to be living in a culture which is more and more deeming fighting for what's right to be a waste of time.
And so it will be if we all take a passive, accepting attitude to bad professional behaviour.

After all the publicity re Storm, BCSCA and financial advisers in general you'd imagine Joe Average would be at least a bit informed and certainly wary.
A friend of mine is about to get a Work Cover claim paid out, not much, probably around $150K.  I asked her what she planned to do with it.
She said she would go to see a F.A and take his advice.  When I suggested he would likely place her into the investment which offered him the best reward, her eyes glazed over, and she clearly just didn't want to know.

So when you have such apathy, it makes for an ideal breeding ground for unscrupulous advisers e.g. Storm.


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## alwaysLearning

Garpal Gumnut said:


> Listen up you guys and gals.
> 
> Garpal decides to become a financial adviser.
> 
> The FIRST thing I am going to do is ensure that if everything goes pear shaped my good wife and children will not be compromised.
> 
> I put the house, the boat and anything of value in her name.
> 
> I form a limited liability company.
> 
> I then engage a young lady who is smart and presentable to be my pa , receptionist, I lease an office in the company name, oh by the way I've gotten a dodgy financial planners license along the way, not difficult, and the I work out a marketing plan.
> 
> I ally myself with some accountants, use my contacts in business to generate throughflow, etc etc.
> 
> Ensure that my office has karma, swimming fish, fountains etc etc.
> 
> And now I am in business.
> 
> Any profits get sent over to my wife and children to ensure that if it goes pearshaped our assets are protected.
> 
> When you , you poor mug realise that my decisions have left you broke.
> 
> TOUGH
> 
> I wind up my company and start again.
> 
> You cannot sue my wife.
> 
> You can sue my company but its broke.
> 
> TOUGH
> 
> Perfick.
> 
> gg




Can it really happen this way? That's is horrible if true 

And to the original poster. I hope that somehow you are able to get your money back. It does sound like gambling to me what he said to you. If you can get some free legal advice somehow that would be a good option. $2000 just for a consult is so expensive.


----------



## dupedbyadvisor

Thank-you all for the input. What is your definition of a "short term" investment? 4yrs or more? 3yrs or more? In the SOA, the financial advisor who "duped" me writes, 

_"To invest money that you currently hold in a bank account, so that when you need it to buy a house in *three years or longer *it will have grown in value enough to cover inflation and the increased cost of building"._

Opinions? 

The investment was made in October 2007...and has succumbed to a $180,000 loss. I doubt my goals will be met within 3 years (from oct 2007).


----------



## nunthewiser

dupedbyadvisor said:


> Thank-you all for the input. What is your definition of a "short term" investment? 4yrs or more? 3yrs or more? In the SOA, the financial advisor who "duped" me writes,
> 
> _"To invest money that you currently hold in a bank account, so that when you need it to buy a house in *three years or longer *it will have grown in value enough to cover inflation and the increased cost of building"._
> 
> Opinions?
> 
> The investment was made in October 2007...and has succumbed to a $180,000 loss. I doubt my goals will be met within 3 years (from oct 2007).





not pointing out the bleeding obvious but october 07 was roughly around the peak of the markets ....


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## dette

Could be read as a guarantee.  Think his crystal ball might be a bit cloudy though....

Thought shorter time frame suited 1-2 years.  But if you had said that you wanted to buy a house in 3 years time, perhaps the implication is that the investment did suit your goals....

Arguments for and against...

However, if the SOA does point to your requirement for short term investment, he would seem to have given confusing advice with 3+yr timeframe, and that may not be appropriate to your requirements.

I imagine there would be lots of arguements to throw around when you are pulling this apart...


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## Sir Osisofliver

Julia said:


> I agree with this.   We seem to be living in a culture which is more and more deeming fighting for what's right to be a waste of time.
> And so it will be if we all take a passive, accepting attitude to bad professional behaviour.
> 
> After all the publicity re Storm, BCSCA and financial advisers in general you'd imagine Joe Average would be at least a bit informed and certainly wary.
> A friend of mine is about to get a Work Cover claim paid out, not much, probably around $150K.  I asked her what she planned to do with it.
> She said she would go to see a F.A and take his advice.  When I suggested he would likely place her into the investment which offered him the best reward, her eyes glazed over, and she clearly just didn't want to know.
> 
> So when you have such apathy, it makes for an ideal breeding ground for unscrupulous advisers e.g. Storm.





Ahh Julia, what you do is this... you shout at the top of your lungs....

ARE YOU OUT OF YOUR FREAKING MIND WOMAN???

She will be so shocked that she may actually listen to what you say.  Alternatively you can put on the fake green Hulk hands, slap her upside the head repeatedly while you froth at mouth yelling in a deep voice "value destruction make Julia MAD!!!"

Julia, horses, water, drinking - applies here - if you are a friend you won't say "I told you so, or If only you'd paid attention..."

When I give seminars there's always one in the room who've been burnt by their FA's, who treats me like a snake oil salesman until they actually hear what I am saying. Bad FA's give everyone in the industry a bad name.

Sir O


----------



## Julia

Sir Osisofliver said:


> Ahh Julia, what you do is this... you shout at the top of your lungs....
> 
> ARE YOU OUT OF YOUR FREAKING MIND WOMAN???
> 
> She will be so shocked that she may actually listen to what you say.  Alternatively you can put on the fake green Hulk hands, slap her upside the head repeatedly while you froth at mouth yelling in a deep voice "value destruction make Julia MAD!!!"
> 
> Julia, horses, water, drinking - applies here - if you are a friend you won't say "I told you so, or If only you'd paid attention..."
> 
> When I give seminars there's always one in the room who've been burnt by their FA's, who treats me like a snake oil salesman until they actually hear what I am saying. Bad FA's give everyone in the industry a bad name.
> 
> Sir O



Ah, dear Sir O, apologies if I'm appearing to generalise unfairly.
I'm sure you're entirely focused on the client's wellbeing.
I happen to know the FA this woman intends to see and he simply shunts everyone into the same managed fund.  He does it very pleasantly and the client walks out really happy.


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## Sir Osisofliver

Julia said:


> Ah, dear Sir O, apologies if I'm appearing to generalise unfairly.



  Julia your generalisation is completely fair.  *Most *FA's are parasites more concerned over their own cashflow. Call us all  b@stards (just say "except that nice Sir O - he's a gem"  )







> I'm sure you're entirely focused on the client's wellbeing.



 Damn straight.[/quote]



> I happen to know the FA this woman intends to see and he simply shunts everyone into the same managed fund.  He does it very pleasantly and the client walks out really happy.




(Then I suggest you ask your friend if you can go along for moral support and throw a curly question or two at him and make him squirm).

Sir O


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## Jack Payback

Just out of curiosity, are you still holding the investments? With the adviser?

The best course of action may be to continue to hold the invested funds in the same asset classes to let them recover over time. Transfer the funds into a low cost managed fund provider, that YOU set up - Rabo Plus have a low cost facility to do this, in fact I use them myself, completely over the internet.

At least then the adviser will not be getting any more trail.

It will take a few years for all our investment balances to recover, but they will.


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## prawn_86

Jack Payback said:


> It will take a few years for all our investment balances to recover, but they will.




Tell that to the people in Japan in the 90's. Look at their index now. Massive assumption made there...


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## Jack Payback

prawn_86 said:


> Tell that to the people in Japan in the 90's. Look at their index now. Massive assumption made there...




Yes, but the Japanese economy relied on electronics and vehicle exports, in the late 90's a lot of other Asian countries came to the global market with lower cost products and they could not compete.

They don't have commodities, like OZ, to export to a growing global demand 
(over the next 20 years) - that will help us out, but that is probably for a different forum...


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## dupedbyadvisor

Jack Payback said:


> Just out of curiosity, are you still holding the investments? With the adviser?
> 
> The best course of action may be to continue to hold the invested funds in the same asset classes to let them recover over time. Transfer the funds into a low cost managed fund provider, that YOU set up - Rabo Plus have a low cost facility to do this, in fact I use them myself, completely over the internet.
> 
> At least then the adviser will not be getting any more trail.
> 
> It will take a few years for all our investment balances to recover, but they will.




hi jack, yes I'm still holding onto the same investments and have removed my Financial Planner from any involvement. Yes I've heard it could take 5 yrs to get to the same value I originally bought them at. Unfortunately I invested at the worst time when the shares were at their peak in Oct 2007. 

There's just not enough protection to stop these greedy Financial Planners gambling with our money the way they do and preying on the vulnerable. Sure, I've reported my FP to the FPA though I'm sure they look after their own.


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## Happy

Julia said:


> I agree with this.   We seem to be living in a culture which is more and more deeming fighting for what's right to be a waste of time.
> And so it will be if we all take a passive, accepting attitude to bad professional behaviour.
> 
> After all the publicity re Storm, BCSCA and financial advisers in general you'd imagine Joe Average would be at least a bit informed and certainly wary.
> 
> .......
> 
> So when you have such apathy, it makes for an ideal breeding ground for unscrupulous advisers e.g. Storm.





It is quite funny that we can take T-shirt back for refund if there is something wrong, but cannot make advisor responsible for their educated advice.
Not happy!

It is only this year that we will have LEMON CAR laws in Australia.


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## beamstas

I don't want to sound harsh here...............

If you just bought a new car that you worked hard for.. lets say a new bmw.. would you go out friday night and lend it to a group of young p platers who are hooning around the city

All im saying is i wouldn't hand my hard earned $$$ over to someone who doesn't care about it

When i burn my toast i don't blame the bread

Sorry for your loss and i hope for your sake the markets turn around and you get your money back! 

Brad


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## dupedbyadvisor

thanks brad. It seems the markets are in another free fall, the last few days have been bad.

For those recommending a no win no fee lawyer, it's not possible. No win no fee lawyers only take on clients for medical negligence claims. If you know of any who would take on such a case as mine - feel free to send a message. 

Yes I agree it's not wise to hand over our hard earned money to a financial planner. Yet if they are licenced, educated and analyze our objective...naturally we tend to trust them. The reality is, *no-one can be trusted. * I've learnt my lesson.


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## beamstas

dupedbyadvisor said:


> thanks brad. It seems the markets are in another free fall, the last few days have been bad.
> 
> For those recommending a no win no fee lawyer, it's not possible. No win no fee lawyers only take on clients for medical negligence claims. If you know of any who would take on such a case as mine - feel free to send a message.
> 
> Yes I agree it's not wise to hand over our hard earned money to a financial planner. Yet if they are licenced, educated and analyze our objective...naturally we tend to trust them. The reality is, *no-one can be trusted. * I've learnt my lesson.




It really is a hard thing
As they are in a position of responsibility

I know a lawyer. I'll ask him when i see him next ( in a couple of weeks ) what the chances are of this type of thing being successful in the courts

Brad


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## Mr J

> Yet if they are licenced, educated and analyze our objective...naturally we tend to trust them. The reality is, no-one can be trusted. I've learnt my lesson.




That's not quite the right lesson. Instead of trusting a licence, education and recognising your goals, you need to trust things like results, responsibility, risk management, honestly, the benefits etc. The lesson isn't that nobody can be trusted, but that people need to earn the trust, and that you have to thoroughly research these kinds of arrangements.


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## Junior

beamstas said:


> When i burn my toast i don't blame the bread




Did you watch Arj Barker on the Comedy Gala the other night?  He used this analogy to illustrate that Global Warming is caused by the sun not the Earth!


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## watsonc

dupedbyadvisor said:


> Hi watsonc... could you please send a pvt message of where you work or a similar company/contact ??




Have you lodged an official complaint? You must lodge an official complaint in writing and send it to financial planner's disputes resolution department.

The financial planner (or fp organisation) must send a reponse in writing to your complaint. 

If you were not happy with the Financial planner's reponse then his organisation must repond to you in writing.

What did their reponse say?


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## beamstas

Junior said:


> Did you watch Arj Barker on the Comedy Gala the other night?  He used this analogy to illustrate that Global Warming is caused by the sun not the Earth!




Yep

Brad


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## dupedbyadvisor

watsonc said:


> Have you lodged an official complaint? You must lodge an official complaint in writing and send it to financial planner's disputes resolution department.
> 
> The financial planner (or fp organisation) must send a reponse in writing to your complaint.
> 
> If you were not happy with the Financial planner's reponse then his organisation must repond to you in writing.
> 
> What did their reponse say?




They responded mostly with justifications about how they acted within the FPA Code of Ethics and that I recieved the best service, and attention. He also refuted my allegations and said, "At no time during the interview stage did I mention short term". So a flat out denial. 

I then refused to communicate with him further. My initial complaint to his office was so I could make a complaint to FOS through ASIC. FOS has closed my case due to the loss going over 180,000. It was suggested on here to break the complaint up into segments and thus show a smaller claim. However, FOS are aware of such practices and don't take them on. 

The FPA are currently reveiwing a complaint I made. They can't claim any losses though. I'm not going to let this ride, justice needs to be served.


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## Julia

dupedbyadvisor said:


> .
> 
> For those recommending a no win no fee lawyer, it's not possible. No win no fee lawyers only take on clients for medical negligence claims.



According to several who have posted on the Storm thread, Slater and Gordon are taking action on behalf of these clients on a no win no fee basis.
Nothing medical about that mess.

I think any lawyer will assess such an approach on an individual case basis.

Sounds a bit as though you have decided no one is prepared to co-operate with you and perhaps as a result have stopped investigating possibilities.

However, if it comes down to a case of "I said", "No he didn't say that", and you have no written record of anything, it would seem pretty difficult to go forward.





> Yes I agree it's not wise to hand over our hard earned money to a financial planner. Yet if they are licenced, educated and analyze our objective...naturally we tend to trust them. The reality is, *no-one can be trusted. * I've learnt my lesson.



That seems rather an over-generalisation to me.   Maybe consider the responsibility is as much yours as the adviser's, in that if you had insisted on a written account of all your transactions with him, he wouldn't be able to deny responsibility.

I'm not trying to 'get at you' but just hoping you'll not swing from one extreme to the other.  There are still good people out there.


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## Investment Guy

Hi All, 

I only just stumbled across this discussion topic, and having read a number of the responses, I felt compelled to contribute in order to clarify what appears to be misguided - though undoubtedly well intended - "legal" advice given by a number of people to our good friend Duped.  My agenda here is simply to ensure that everyone reading these threads had a clear understanding of what their legal rights actually are and what they can do to actually enforce those rights.

To give you an idea of where I'm coming from, I am a corporate lawyer with over 10 years' post-admission experience, and have specialised within the financial services industry.  I have also worked inhouse within financial services institutions as their head of legal, risk and compliance departments.  I have acted both for and against - for mostly for - various participants in the industry, such as financial planners, stockbrokers, research houses, lenders, insurance companies, accountants, real estate agents and the like.  I have acted in numerous compensation claims, Financial Ombudsman Service (FOS) complaints, legal proceedings and even ASIC investigations.  For the most part, as indicated, I have spent a great deal of my professional time defending/protecting the financial services participants against investors such as yourselves. 

But I am also an avid investor myself.

So given my background, I thought I might be able to offer some unique insight into this particular topic of discussion, which hopefully might be of some benefit to many of you here.  As a fellow investor, I felt that this is the least I could do.  [But first, an obligatory warning:  the following is general advice only, and should not be necessarily be relied upon as it may not suit individual people's circumstances.  ]

(1.)  The law offers considerable protection to investors, so much so that I believe it is actually heavily biased in favour of investors.  It may not seem like it to the non-lawyers among you, but this actually the case.  You have more power than you might realise.  That is, as an aggrieved investor, you are actually in a stronger bargaining position than you think.

(2.)  The financial services industry is a highly (overly) regulated industry.  This is particularly so for the financial advisors such as financial planners and stockbrokers.  These advisors need to do so many things _perfectly _in order to comply with the many applicable laws and regulations.  Even if they give you the right advice, they can still get into serious trouble if they don't strictly comply with what the laws and regulations expect of them (for example, if they quote fees or costs as a percentage (%) instead of dollars ($)).  The sorts of things they are required by law to get right include:

-  That they ask enough questions to ascertain your situation, needs and objectives;
-  That they act in accordance with your instructions;
-  That they provide you with an SOA if they give you personal advice;
-  That they give you an SOA in a timely manner;
-  That the recommendations they make meet your situation, needs and objectives (or if they don't, then explain why not);
-  That their recommendations include advantages and disadvantages:
-  That they conduct a risk profile of you as an investor;
-  That the recommended asset allocations are consistent with your risk profile;
-  That the products they recommend have been properly researched;
-  That they keep full records of all communications and research;
-  That they fully and clearly disclose any conflicts of interest;
-  That they fully and clearly disclose any fees and commissions received.
-  That costs and fees are disclosed in dollars ($).

There are actually a lot more than this, but you get the idea:  there are quite onerous obligations imposed by law on financial advisors.

(3.)  Suing a financial advisor - by that I mean suing them successfully - is so much easier than you might think, for the reasons explained earlier.  It just takes time and effort.  For those of you who have received a "Statement of Advice" (SOA) , you will see how detailed those things generally are.  Much of the detail you see in there - colloquially known in the industry as "guff" - is mandated by the Corporations Act as well as by ASIC through its various "Regulatory Guides".  It is, however, rare to find an SOA with no defect of some kind - and under the Corporations Act, even a seemingly minor defect technically equates to a contravention of the law.  Any competent lawyer with experience in reviewing SOAs will generally have no problems identifying non-compliances, largely because many financial advisors themselves still don't seem to grasp the importance of strictly complying with the numerous and seemingly trivial, requirements of the legislation.  

(4.)  Most investors are plodding along blissfully unaware that they might well have a legitimate case (known in legal circles as a "cause of action") against their financial advisors if ever they decided to sue.  You don't even need to have experienced a decline in the capital value of your investments or returns generated - you may, for example, claim for the recovery of advice fees paid, trail commissions and hidden commissions paid by product providers directly to the advisors.  You may claim for any interest paid on investment loans.  You may even claim "opportunity cost", which is the profit you would have theoretically received if you had invested your funds elsewhere.

(5.)  Some 99% of cases against financial advisors settle quietly out of court....eventually.  That is, the investors who have lodged a claim get a pay out.  Don't quote me on that percentage because, frankly, I just made up; it is however consistent with my own experience, both as acting for and against financial advisors.  Of course, you will never hear about those settlement arrangements as they are usually made subject to a strict confidentiality agreement.

(6.)  Even those cases with little or no prospects of success, it is not uncommon for dogmatic claimants to receive some (nominal) payout.  The reason for this is that the financial services organisations are aware that they will incur considrable costs - such as FOS fees which can be as high as $5K to $8K - if they choose to defend such cases.  Their professional indemnity insurers (when they do get involved) generally adopt the same approach as they would prefer to settle informally than have to invest considerable time and incur considerable costs in defending matters at a trial.  For investors wanting to sue, particularly those who have not had much to do with the legal process, I know it will require quite a leap of faith to accept all of this.

(7.)  So if you genuinely believe that your financial advisor had done something wrong, or suspect that they might have done something wrong, I would suggest that you pursue it.  Naturally it would be better to go to a lawyer (better still, one specialising in financial services), but even without a lawyer there are a number of options you can take to secure a favourable outcome, such as:

    -  Lodge a complaint/claim to the financial advisor
    -  Lodge a complaint/claim to the financial advisor's dealer group (AFSL holder)
    -  Lodge a complaint through the relevant industry body (eg. Financial Planning Association)
    -  Lodge a complaint through ASIC
    -  Lodge a claim through FOS
    -  File a claim in court (even if only in the Magistrates Court).

(8.)  The key thing is to prepare your case logically, rationally and in great detail.  It is important that you leave emotion out of the picture - I have seen too many legitimate cases fail (usually in FOS) simply because the investors have littered their written submissions were far too much emotion thinking it would bolster their case.  

(9.)  My strong recommendation is to seek the assistance of a lawyer [Disclosure:  The author has a conflict of interest in making such a blatantly self-serving recommendation!].  But, seriously, at least go and have a quick chat with one or two before you do anything - most will agree to meet with you at a first interview at no charge.  Just ask them.  Some legal guidance is better than no legal guidance at all.

(10.)  If you do decide to formally engage a lawyer, there may be those who will act for you on a "no win, no fee" basis.  Unfortunately, such an arrangement is rarely offered in the financial services industry (unlike personal injury cases), but if your case is worthwhile enough, I am sure there will be those who will agree to accept your case on a speculative basis.  Ideally, you should shop around for a lawyer who specialises in financial services law (because this is a highly technical and specialised area), but if not, then one who has experience in corporate or commercial litigation will do just fine.  

There is only one parting comment I would make:  I noted that a few of the forum members were critical of "suing" on the basis that people should accept personal accountability.  Personally, as an investor, I too am a proponent of the personal accountability argument.  However, the comments/guidance above are not intended to address that debate.  Rather, my comments were intended to assist people to make a more fully informed decision as to how the legal process actually works in practice if ever they find themselves in the position of questioning the service provided to them by their financial advisor.  Ultimately, none of us here are the authority on whether it is or isn't "morally" right for a particular investor to sue their advisor:  that is a matter that is ultimately for the legal umpires to decide (ie. FOS, ASIC or the courts).  

I know this has been a long read, but I hope it has been helpful.  (Some feedback - good or not-so-good would be much appreciated!  

*-INVESTMENT GUY*


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## tech/a

IG

Great stuff.

You know the *one thing that aggravates me* more than anything else are these managed Fund Salesmen who tout themselves as Financial advisors when in fact all they have is licence from a dealer principal.

They cant advise on anything more than that which their dealer principal is involved in.
They cant talk about and indeed advise on Property/Stock trading individual portfolio's/Futures/Forex,or any other investment tool. They are a waste of good office space.

These guys should not in my view be able to call themselves anything to do with Financial advising OR planning.


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## breaker

Great stuff Mr Advisor,
I to have been caught up in advisory misgiving and got paid buy the advisor not to pullout as he would lose his kick back,an investment he has put us into has gone pear shaped and we have decided to cash out and pay any fees owing [20k] which we did. The institution then pulled another 20k [which we didnt have, put account in red] from our account [thought we cancelled that] they still reckon we owe them and are charging interest .We have been on to FOS who claim we have a case .The institution has been very quiet it is also one very well known.
Any more trouble and I, with your permission would like to PM you as to a suitable  lawyer in QLD


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## Julia

IG, many thanks for such an erudite and useful contribution


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## Investment Guy

Thanks guys.  I probably revealed far more "insider secrets" than many of my colleagues in this industry would have been comfortable with, but I just felt that a re-alignment of forum members' understanding of the legal process was in order. 

BTW, sharing all that information might well make my job a lot harder in defending financial advisors in future, but I also believe that if advisors genuinely do the right thing by their clients - and comply with all the legal requirements - then they should have absolutely nothing to fear if ever they are called to account.

-*INVESTMENT GUY*


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## princeplanet

Hi,  I just read your great post about what to do if you've been duped by the FA. I've been with mine for 10 years, and still am. Been far from happy most of that time as I'm still trying/hoping to claw back losses. The biggest came in 08 of course and my main complaint is that I have emails to my FA saying I wanted to get out by the end of 07 and into property. Infact he'd known this for years and we have documentation to support this. Mid December 07 is when I instructed I wanted to pull out $1M to cash. There was no-one in the office, all on holidays. There was clearly no warning from them in any way that they would be on holidays so early and they have since put measures in place to stop the situation recurring when investors need advice/action over that period. The short story is I lost over half my holdings after severe pressure to not sell in January, and for the next few months after that. Of course once the serious losses set in it was too late to get out. My mid term plan had now become a lifelong one, ruining all my plans for myself and my wife.

The company (who I'm happy to name upon request) have had 5 names in as many years it seems. Apparently they were going to be sued by several disgruntled investors in 09 but settled out of court, using up the $2M insurance cap they had. Seems they did a "Pheonix" a few times since and have other grieving ex clients. I heard there's a 6 year period before a possible claim would lapse, but have also been told that since the company have renamed, they bear no responsibility for the past company's sins.

In your understanding, is there any recourse left? I tried one pay if you win laywer and they said ASIC was my only (slim) hope. Any thoughts?

Thanks.


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## breaker

Ours is now under ACCC investigation


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## Investment Guy

princeplanet said:


> In your understanding, is there any recourse left? I tried one pay if you win laywer and they said ASIC was my only (slim) hope. Any thoughts?




Hello Lindsay,

I'm not sure if you're still active on this forum but, if you happen to get this, please accept my profound apologies for the delay in responding.   For what it’s worth, below are my preliminary thoughts on your situation:

Firstly, I'm actually quite surprised that you found a "no win, no pay" lawyer for your case as they are actually quite rare in the field of financial services (contrast the field of personal injury claims where it is practically the norm).  Most corporate lawyers who specialise in this particular area invariably act for the corporations, not the individuals.

Secondly, while I respect my fellow lawyer's opinion regarding ASIC, I regret that I do not share the same degree of faith in our corporate regulator insofar as your case is concerned.  I say that for two respectful reasons based on my own experiences: (1) ASIC generally focuses on the "big fish" and is mostly unconcerned with individual situations unless there is flagrant criminal activity, as opposed to mere allegations of negligence as yours appears to involve; (2) ASIC's fundamental role is to sanction or prosecute wrongdoers, and not to recover money from them on behalf of aggrieved investors.  (Yes, of course, they have been known to do that - such as the case of Westpoint - but that should be considered more the rare exception rather than the general rule.) 

Thirdly, yes I do believe there is hope for you for based on the following:

(1)  You appear to still be within the 6-year limitation period (as you have recognised);

(2)  The fact that a company has been re-named is irrelevant - it's still the same entity from a legal perspective;

(3)  Financial advisory firms have professional indemnity insurers behind them - and as long as the insurers exist, any reasonably competent lawyer should be able to negotiate some sort of a settlement for you;

(4)  Even if the responsible company has been deregistered, there still remains a number of avenues for you, such as pursuing the adviser directly, or the company's directors or its officers, each of whom will allow you to indirectly seek recourse from their professional indemnity insurers (which I would imagine, for most people, would be the ultimate objective).  There is also a provision in the Corporations Act that will allow you to pursue the insurer directly where a company has ceased to exist.  [I cannot, of course, say if any of these courses of action is appropriate for you as I do not know your situation well enough, but these are generally the sorts of options that would be considered by any aggrieved investor and their lawyer.]

(5)  An inexpensive avenue by which you can pursue a claim would be the Financial Ombudsman Service (FOS). However, for a claim such as yours, I would honestly suggest not handling it yourself as there is too much money at stake - get a legal professional to do it.  Sadly I have seen far too many legitimate claims fail at FOS simply because the claimants did not know how to prepare their submissions correctly.  This is not to suggest that you won't go a good job of it; I'm just saying there exists a broader range of technical considerations that can be relied upon as part of your legal arsenal to maximise prospects of success at FOS but most people would not be aware of those considerations.

It is my strong suggestion that you should immediately seek out a lawyer who specialises in this particular area (ideally with combined litigation and financial services law experience), negotiate some sort of a deferred or "no win no way" fee arrangement, and get them to advice you on your full options, prospects and strategies.

Lindsay, I hope all this helps.  Apologies once again for the lengthy delay and I do wish you and your wife a good outcome with this unfortunate situation.

Regards,

-INVESTMENT GUY


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## rossCaruso12

This seems like such a horrible situation to be put in.

Best of Luck in your situation and I hope all things panned out well for you.


----------

