The Financial Ombudsman Service (FOS) is a consumer friendly facility that allows aggrieved financial planning clients to recover losses from their advisers in a quick, cheap and simple forum. Fees are no more than a few thousand dollars (compared to tens of thousands for a court case) and can be recovered from the financial adviser (subject to caps).
A recent case saw $197,000 recovered from a negligent adviser. FOS is a much better option than court.
It’s not unusual for advisers to sit down with a new client and look over their affairs and see they have received poor financial advice in the past. Sometimes it’s just poor financial advice. But sometimes it’s more sinister, and we can see that the client has received advice that is patently negligent, and is not in their best interests or appropriate to their circumstances.
Common examples of negligent financial planning advice include:
- “switching” of insurance products to get new first year commissions which are then retained by the ‘adviser;’
- rolling super benefits out of lower cost super funds to higher cost super funds, with significant long term financial detriment;
- failing to advise clients of the potential benefits of low cost super funds, such as the extremely cheap and effective (but commission free) life insurance options;
- recommending clients ‘invest’ in off-the-plan apartments (and typically not disclosing conflicts of interest, ie hidden commissions);
- recommending clients invest in risky investments that are not appropriate or in their best interests such as hedge funds, emerging economy funds, or even shipping containers;
- recommending share trading (compared to long term share investing);
- recommending the use of expensive investment platforms, which are not needed and have excessive costs;
- failing to recommend investments that are suited to the client’s risk profile, as understood by a reasonable financial planner; and
- failing to provide advice in the form required by the Corporations Act
The good news is you can get your client’s money back for them.
MLA Lawyers is expert at handling complaints by consumers to the Financial Ombudsman Service, commonly known as FOS. MLA Lawyers can handle a FOS complaint for you or your client. It’s quick, it’s inexpensive, and it avoids the complexity and stress of a court case. Most consumer complaints are settled in the consumer’s favour, with a small order for costs.
MLA Lawyers’s fees for preparing and presenting FOS complaint are usually capped and are usually tax deductible. Plus there is a no win-no-fee policy, so you and your client cannot lose.
If your client has suffered a financial loss contact us at MLA Lawyers to discuss how they can be assisted through the FOS compensation and rectification process.