Problems with a financial adviser

What to do if things go wrong with an adviser

The right kind of financial advice can help you achieve your financial goals. However sometimes things can go wrong, so it's important to know what to do. It's also important to know how to protect yourself from fraud and other potential misconduct from a financial adviser.

How to complain about a financial adviser 

If you're unhappy with any aspect of the advice or service you receive, try to talk it over with the adviser.

If you are still not satisfied (or your adviser won't meet with you) you should make a complaint through the adviser's internal dispute resolution system. The adviser's financial services guide will tell you how to do this.

You should receive an acknowledgement letter from the adviser's internal dispute resolution system within 14 days. They have 45 days to give you a final response.

If you're unhappy with the response, you can contact an external dispute resolution scheme. The business must tell you which scheme it belongs to. See how to complain for more details.

You can also complain to the adviser's industry association and/or professional body. Check ASIC's financial advisers register to see which associations or professional bodies the adviser belongs to. 

Case study: Gary makes a complaint

Young Man Hand At Head

Gary was advised to invest in a company which, after 6 months, became insolvent. Gary contacted his adviser to find out what to do. His adviser refused to meet with him or speak to him on the phone.

Gary wrote to the firm complaining about the adviser's conduct. The firm didn't respond to Gary. After sending two letters and waiting more than a month for a response, he decided to make a complaint to the firm's external dispute resolution scheme, the Financial Ombudsman Service (FOS). FOS investigated the complaint and found that the advice given to Gary was inappropriate. The scheme awarded Gary compensation for his loss.

How to check your investments 

Even if you have a trusted relationship with an adviser, it doesn't mean you should give them control over your money.

Keep control and avoid fraud by using these tips:

  • Power of attorney warning - Don't give your adviser power of attorney. Reputable advisers won't ask you to do this.
  • Be wary of blank documents - Never sign a blank document given to you by your adviser.
  • Set boundaries - Avoid long-term, open-ended arrangements even if you do have reason to give your adviser power to buy and sell investments on your behalf.
  • Keep your paperwork and track investments - If you keep all your receipts and other documents in one place, you'll be able to track your money and check statements for mistakes. Most people get investment statements and reports twice a year. Be sure all mail or emails about your investments are sent to you, not to your adviser. When you invest with a company, make sure you receive a receipt or statement within a month - if not, call the company and ask for one. Find out more about tracking your investments.
  • Make arrangements for when you are sick or away - If you are sick or going away for a long time, authorise an independent person, a solicitor or trustee to act for you and to check what your adviser is doing.
  • Writing cheques - Never write cheques payable to your adviser if the money will be used for investments. Make the cheque payable to the product provider instead.
  • Check your payments - Always make sure any electronic payments or cheques have the right account number and electronic payment details.

Protect yourself from fraud 

Act immediately if something does not add up or look right. Contact your adviser and if the matter is not sorted out quickly, make a formal complaint. If you suspect fraud or dishonesty you should contact your local police and ASIC. For more information see how to complain.

Financial services from a lawyer

Some lawyers, in addition to professional legal services, may offer financial or investment services. If a lawyer gives you general or personal financial advice they must be licensed. You can check their details on ASIC's financial advisers register.

When you give money to a lawyer for legal services, it is usually protected by a fidelity fund. However, any money you give them for investing does not have the same protection and you may not be compensated if the money is lost through fraud, theft or error.

To protect your money, never give the lawyer cash or write cheques payable to the lawyer or law firm if the money will be used for investments. Make the cheque payable to the product provider instead.

To make a complaint about the conduct of a lawyer or law firm, contact the relevant legal services commission in your state.

If you're concerned that a lawyer or law firm might be providing financial advice without a licence, you can report it to ASIC.

Has your financial adviser been banned?

Good financial advice can help you achieve your financial goals, but advisers don't always do the right thing by their clients. This can result in them being banned from providing financial advice, either for a period of time or for life, depending on the seriousness of their actions. Find out what to do if your financial adviser been banned.

If you're unhappy about the service you've received from a financial adviser, don't be afraid to complain. Even if you have a good relationship with your adviser, you should take steps to protect yourself from fraud. After all, it's your money.

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Last updated: 23 Oct 2017