Queensland investors who lost money in the LM First Mortgage Income Fund due to bad financial advice have been urged to seek immediate legal advice before their right to recoup funds through litigation expires.
Commercial litigation lawyer Mark Walter said the firm was aware that financial advisors had inappropriately directed tens of millions of dollars of investors’ funds into the high risk Gold Coast-based mortgage fund which yesterday went into administration.
“The people we are talking about are typically risk averse and conservative and they have put their funds into this high-risk mortgage fund because their financial advisor told them to, although it was debatable as to whether the fund was appropriate for them.”
Mr Walter said Slater and Gordon had already issued legal proceedings against financial advisors on behalf of a number of investors who invested in the LM fund on the advice of their financial planners and more proceedings would be issued in coming weeks.
Since the height of the GFC in 2008, the firm has helped thousands of Australian investors recoup millions of dollars in losses sustained as a result of bad financial advice.
Mr Walter said some claims for investment recommendations in the pre-GFC boom period around 2006 and 2007 may soon be statute barred.
He said investors generally had six years to lodge a claim against financial planners before their right to sue expires, meaning those who put money into LM should to seek immediate legal advice to ensure action was taken in time.
"It's important that people exercise their right to hold their advisors to account and seek legal advice before it is too late,” he said.
"The LM fund was particularly popular with financial planners in communities like Cairns, the Gold Coast and the Sunshine Coast, where there are a significant number of retirees with money to invest."
Mr Walter said investors generally had a low awareness around their right to recoup funds from advisors lost to bad advice.
“In our experience, very few people have any sense that their losses may be recoverable until they seek advice and for many of the people who have found themselves in this unfortunate situation, it will soon be too late to enter the recovery process,” he said.