You web browser may not be properly supported. To use this site and all its features we recommend using the latest versions of Chrome, Safari or Firefox


Receiving bad financial advice can have a devastating impact on your savings and retirement plans.

As we plan for the future, it’s becoming increasingly common for people to seek advice from a financial advisor. The advice of a competent financial advisor can be invaluable when reaching important financial milestones such as planning for retirement or seeking advice about what to do after selling a business.

Most financial planners provide sound advice to their clients. That advice can make a substantial difference to people’s financial health and stability. The financial planning industry itself is also striving towards a higher degree of professionalism.

The industry should be praised for those efforts.


Despite this, some clients of financial advisors still fall through the cracks and receive bad financial advice. When this occurs, it is important for both financial planners and their clients to know their legal rights and responsibilities.

People who seek advice from a financial advisor have a right to assume they will receive a certain level of care and expertise. Their financial affairs should be properly managed. Financial advisors are legally obliged to ensure that they obtain sufficient information about the client’s financial needs and objectives, understand the financial products they are offering and act in the scope of their expertise. In many cases, financial advisors are also required to provide their clients with a written record of their advice, providing reasons for their investment recommendations.

When a financial advisor’s work falls below the minimum standard, there can be serious problems. Bad financial advice can lead to significant financial losses. Retirement funds can be put at risk. The lifestyle that people envisaged for their retirement and worked very hard for can be lost.

If an advisor provides bad financial advice that falls below the minimum standard, their clients may be entitled to compensation through the courts.

In my experience, many people do not realise that they may have legal remedies available to them to recover compensation. They chalk up their losses to bad luck, feel embarrassed or believe that they are somehow personally responsible for the losses they have sustained. This is not always the case. With that said, losses caused by market fluctuations are not usually sufficient to make a claim. The legal test relates to the appropriateness of the advice provided, when compared to an individual’s personal circumstances, viewed against a reasonably competent professional standard.

If you are concerned about the advice that you have received from a financial advisor, you should consider obtaining independent legal advice on the avenues for compensation that may be open to you.

The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.

Thank you for your feedback.

Related blog posts

Consumer and the Law
Liar loans: how mortgage brokers are putting clients at risk

The term ‘liar loans’ has been coined on the back of the Banking Royal Commission. This is because studies have shown almost 40 per cent of loan applications completed through mortgage brokers contained at least one factually incorrect statement. Whether mortgage brokers are providing lenders with incorrect information, or information that is out-of-date, they are putting themselves – and their clients – at risk. A recent study conducted by the Consumer Credit Legal Centre in New South Wales identified some mortgage brokers were breaking the law when filling out loan applications for their clients. Common examples included brokers suggesting their clients provide a different answer...

Planning desk close up documentresize
Consumer and the Law
How to lodge a complaint with Australian Financial Complaints Authority

The Australian Financial Complaints Authority (AFCA) acts as the middleperson between financial firms and consumers or small businesses, offering free and independent dispute resolution services. It deals with complaints about financial advice, insurance, banking and superannuation products and services. While the time limit to lodge a complaint to AFCA is usually between two and six years, the Australian Government recently created the opportunity for those with complaints up to 10 years old to come forward. This means consumers and small businesses have until 30 June 2020 to lodge complaints dating back to 1 January 2008. To lodge a complaint, you must follow AFCA’s process. It is...

How to lodge a complaint with Australian Financial Complaints Authority
Business Law
Proposed Changes to the Franchising Code of Conduct

Franchising is big business in Australia, with approximately 1,120 franchise systems and 79,000 franchise units operating nationally1. As franchising is a diverse sector with characteristics that are unique from other business models, franchises are governed by a mandatory Franchising Code of Conduct (Franchising Code).2 The Parliamentary Joint Committee on Corporations and Financial Services recently completed an inquiry into the operation and effectiveness of the Franchising Code and has released the Fairness in Franchising Report (Report).3 Some of the key findings and recommendations of the report are discussed below. The Committee recommends that the Australian Government establish an...

Waitress In Black Apron Upload

We're here to help

Start your online claim check now. Or, if you have a question, get in touch with our team.