What to do if you've received bad financial advice

In January 2018, the Australian Securities and Investment Commission (ASIC) published the results of a financial advice file review of the big 4 banks and AMP.

It revealed that three quarters of all financial advice provided by the big 4 banks and AMP was in breach of the law, particularly the duty to act in a customer’s best interests and the duty to provide appropriate advice.  

The report found that on average the big 4 banks and AMP recommended customers invest in in-house product almost 70% of the time and advice was more likely to be unlawful where advisers recommended an in-house product instead of an external product. 

An in-house product is a super fund, insurance policy, or other investment product that is owned by the same bank that the financial advisor works for.  This practice is sometimes called ‘vertical integration’ and it has led to devastating outcomes for thousands of Australians.

Advisors often lacked the knowledge to properly consider a customer’s existing financial product such as the existing super fund.

Conflicts of interest by advisors are not being appropriately managed – advisors are often incentivised to sell their bank’s products in preference to a perfectly good external product, without properly explaining the reasons to the customer.

You may have a legal claim for compensation if you received financial advice from an advisor affiliated with one of the following organisations:

• AMP Limited (AMP)
• Australia and New Zealand Banking Group Limited (ANZ)
• Commonwealth Bank of Australia (CBA)
• National Australia Bank Limited (NAB)
• Westpac Banking Corporation (Westpac).

It’s not always clear whether you financial advisor is licenced through one of these companies because they often use different names.  If you’re not sure we can help you find out.

Read a summary of ASIC’s report.

On 29 January 2013, the Australian Securities and Investment Commission (ASIC) announced it had accepted an Enforceable Undertaking from Macquarie Equities Ltd (MEL). ASIC is an independent Australian government body that acts as a corporate regulator and works to protect consumers, investors and creditors.

An investigation was carried out by ASIC that revealed serious and systemic problems with compliance at Macquarie Private Wealth, including cases in which Macquarie financial planning could not show a reasonable basis for the advice it had given out, and had failed to keep proper records for its clients.

Macquarie finance has since reached an agreement with ASIC to undertake an internal review; however, ASIC is not requesting that Macquarie's financial services audit every client's file, and there is no guarantee that Macquarie's internal review will find and compensate every client who received bad advice.

If you are a current or former client of Macquarie Private Wealth in any state or territory of Australia, and you think you've received poor financial advice from a planner resulting in bad performance by your investments, you should seek independent legal advice.

It is important to note that Macquarie's negligent record keeping may make it difficult for them to defend valid claims. Time limits apply so it is important to get proper advice soon. As ASIC conducts its investigations, you may be contacted by Macquarie finance or another entity about any investment advice received from its financial advisers.

Be aware that any information you give Macquarie Private Wealth or ASIC might be used against you if you decide to sue Macquarie finance. You should always get independent legal advice about how to respond to any requests for information.

Have you received financial advice from NAB since 2009? If so, you may be eligible to have your file reviewed through the process of the NAB’s Financial Advice Remediation program. Maurice Blackburn can provide independent legal advice to ensure you get the compensation you are entitled to.

Following a string of customer complaints against NAB’s financial planners, on 21 October 2015, the corporate regulator ASIC announced that an agreement had been reached with NAB (formerly National Australia Bank) whereby the bank will contact customers who may have received non-compliant financial advice since 2009.

What is the NAB Financial Advice Remediation program?

NAB has begun what they refer to as a "look back" process intended to identify customers who were negatively affected by advice provided by the bank. Clients identified by this process will have their files reviewed to determine if compensation should be paid.

NAB will also provide affected customers with financial assistance up to $5,000 plus GST to seek professional independent advice where appropriate.

Have you been affected by bad advice from NAB financial planners?

If you are a current or former client of NAB in any state or territory of Australia, who received what you believe to be poor financial advice from a planner and are unhappy with the performance of your investments, you should seek independent legal advice.

You also may have a claim even if you did not receive advice directly from NAB, but were advised by one of its subsidiaries:

• MLC
• NAB
• JBWere
• JANA
• Plum
• Apogee
• Godfrey Pembroke (Financial Advice Specialists)
• Garvan Financial Planning
• Meritum

Get independent advice before accepting any offer

If you have been offered financial compensation by NAB, It is worth getting independent legal advice before accepting. When offers of financial compensation are made, it can be tempting to take the first offer and put the experience behind you. However, the first offer is almost never the best one, and some cases have seen up to seven reviews before settling on a final—and significantly higher—offer of compensation.

Contact us today to talk about what we can do to get you the compensation you deserve.

Have you received financial advice from Financial Circle to purchase insurance products or switching superannuation providers? If so, you may be eligible for compensation.

On 2 November 2018 the Federal Court of Australia ordered Financial Circle to pay civil penalties of $8,980,000 in total after it engaged in numerous contraventions of financial services, credit and consumer protection laws.  The Court found that in providing advice about purchasing personal insurance products and to switch superannuation providers, Financial Circle:

• made false and misleading representations and engaged in misleading and deceptive conduct
• engaged in unconscionable conduct
• breached its licensee obligations under its Australian financial services licence (AFSL), including obligations requiring that it:
  • take reasonable steps to ensure that its authorised representatives act in clients’ best interests and provide advice that is appropriate
  • do all things necessary to ensure that the financial services covered by its AFSL were provided efficiently, honestly and fairly
• engaged in a credit activity without a licence authorising it to engage in that activity.

Get independent advice before accepting any offer

You should get independent legal advice if you are contacted by Financial Circle about this or if you are offered financial compensating. It's best to get legal advice before accepting any offer.

When offers of financial compensation are made, it can be tempting to take the first offer and put the experience behind you. However, the first offer is almost never the best one, and in some cases up to seven reviews may be needed before settling on a final—and significantly higher—offer of compensation.

Contact us today to talk about what we can do to get you the compensation you deserve.