Financial Advisor Negligence – How to Claim Damages?

September 18, 2023    Civillawyers
Financial Advisor Negligence – How to Claim Damages?

For individuals who wish to acquire some financial advice, they must check whether or not the advice they received addresses their respective requirements. One must speak with a financial negligence lawyer if they have suffered a loss after getting financial advice.

He/she will get the chance to obtain compensation for negligence against the individual who provided them with the advice. It’s essential for all financial advisers to properly inform and explain to their clients about the risks related to investment.

They should also create a monetary tolerance assessment, and after that, the client can make their decision. But in several cases, financial advisors might turn out to be negligent, which enables the clients to suffer losses.

Through this writing, one will gain some deep insights into financial advisor negligence and how he/she obtains compensation for the damages they’ve suffered.

Read More – Medical Negligence Claim Process

Financial Negligence Claim: What Do Courts Consider?

When one wants to know whether or not there is a claim for financial negligence, the Australian courts will give consideration towards the common law.

The court will also give consideration to legislation such as the Australian Consumer Law and the Corporation Act 2001. The Australian courts will also consider whether or not the advice was deceptive and misleading.

Apart from that, the courts will also consider if there was a breach of the retainer, relevant standards or the scope of the agreement expected of the financial advisor.

When Can You Apply For a Financial Negligence Claim?

One might get compensation for financial negligence against the financial advisor when they receive advice like:

  • He/she didn’t cover a specific investment, for instance, shares.
  • When one did not request for an advice
  • When there was no presence of any contractual obligation to advise
  • The financial advice led to deceptive and misleading conduct.
  • The advice provided is related towards an investment that is not well-suited or did not give any consideration to the personal circumstances of the client.
  • There was no proper basis for the financial advice.

If he/she wants to know more about obtaining compensation for financial negligence, please consult the financial negligence lawyer in Perth, who can provide the help needed.

Presence of a Damage or Loss: Was There One?

When it comes to assessing whether or not the financial accountant or the advisor has caused damages or losses to the client, the court will check the entire circumstances of the claim.

To understand this part properly, here is a small illustration: When a person enters into a contract for tax minimisation, the court in Australia will consider whether or not the client was well aware of the dangers and voluntarily took it.

Apart from that, the Australian courts will also consider if there is a limited liability. Some of the examples are:

  • The client depended heavily on the advice provided by a 3rd advisor who did not offer advice as to the risk or success of the investment OR
  • The advisor couldn’t foresee the investors would depend heavily on the advice.

How to Get a Claim for Financial Damages?

To obtain a claim for financial negligence, he/she should make a complaint to the financial adviser and the company they work under. When he/she is not satisfied with the response they receive, they can do the following:

  • Take the problem to AFCA [Australian Financial Compliant Authority]
  • Take the entire issue to court

Since all financial damage claim cases differ for every individual, it’s advised that he/she speak to a good financial negligence lawyer before proceeding further.

One can also take their case to the Australian Financial Compliant Authority as it will be cheaper, but the entire process is time-consuming. Apart from that, there is also a $500,000 cap for the compensation.

The AFCA does not have the power to make a decision on a complaint where the overall amount of the damages goes beyond $1 million.

If one wants to take their issue to court, there will be no cap compensation, and he/she will receive recompense for the loss of opportunity. The court process is a quicker and better option, but it’s a bit costly if one loses the case and is ordered by the court to pay for the unfavourable costs.

Read Also – Medical Negligence Compensation Payouts

How Financial Negligence Lawyers Can Help?

Under the financial advisor’s negligence, it will cover inappropriate, poor or bad monetary advice that has caused a person to experience losses and damages.

The financial advisor negligence Lawyer can offer both lawful guidance and advice to their clients when the financial advisor does the following:

  • Suggest him/her with incorrect financial investments or products.
  • Fails to take up due diligence on the monetary investments or products that have been suggested.
  • Not undertaking the correct investor risk profile before suggesting monetary investments or services.
  • Suggests highly risky financial investments and products. This might provide all the financial advisors with a much stronger or stronger fee or commission when many of these products start to create issues with your risk profile.
  • Recommends that one should take out the margin whenever they want concerning a person’s financial situation, investment risk profile and investment opportunities.
  • Suggests that one should go for a long-term investment. All the products of long-tail agricultural investments are of high risk and might offer a good ROI [Return on Investment].
  • Agrees to offer advice on insurance like permanent disability and death insurance and also suggests trauma insurance, business insurance and income protection. Also suggests an inadequate and incorrect cover regarding all circumstances of a person.
  • Suggests all older individuals borrow near or during their retirement
  • Suggests all the investors borrow from their residence and use those funds to buy shares that will transform into an “equity” within the margin loan.
  • Recommends all those investments, which are extremely risky, after letting all the investors know that these types of investments are completely safe.
  • Suggests the substantial or all the sum of the investment is in one single item. For instance, I was having many flowers within a basket instead of properly having a mixed and balanced investment strategy and portfolio.

Read Also – How to File a Complaint for Medical Negligence

How to Find the Best Financial Negligence Lawyer?

Finding a reliable and trusted financial negligence lawyer might be a tricky job because there are many of these lawyers available. Even though these lawyers might promise to offer an excellent service, you should not randomly pick a lawyer.

Before you think of opting for the compensation, you must take some time to check and do some research on all the lawyers. Check to see their qualification, their skills, how good they are at handling financial negligence cases and many other things.

One can also ask the negligence lawyers how they handle such cases, what type of technique or method they follow and whether or not they can provide a positive outcome.

It’s also important to check how many years of experience they have that can prove they can handle a person’s financial negligence case without much hassle.

Furthermore, don’t forget to go through the review section to learn more about the lawyer. It will literally provide you with information that you will not come across on the lawyer’s website.

Ending Note –

It’s extremely crucial to obtain financial-related information and advice from people who are highly skilled and have proper understanding and knowledge. One can also call in the Civil Lawyers Perth to offer him/her the help they need.

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