The Australian Securities and Investments Commission (ASIC) oversees and regulates the financial industry and any actions here. Financial advisors and financial institutions must adhere to the rules and guidelines ASIC sets.
Besides having obligations to the ASIC, these financial advisors are also obligated to you under the law. However, you cannot always rely on the financial advisors’ accuracy, efficiency, and integrity. So, clients like you sometimes end up feeling disappointed and sustaining financial loss.
If you undergo financial damage due to their negligence, it is best to file a compensation claim with the help of a financial negligence lawyer. Read this article to learn how financial negligence can impact your future and what’s the way out.
Financial Negligence: What Is It?
Since financial professionals come with top-tier degrees, extensive training, and high payouts, people keep high-performance expectations. However, any restricted or independent financial counselor who wants to suggest “what you must do” must first have their advice approved by the ASIC.
This indicates that the financial professional is subject to the rigid regulatory requirements set forth by their regulating organization. As a result, as their client, you are due a professional duty of care. Usually, these professionals perform best by making the most out of their expertise and care.
At the end of the day, they’re only humans, capable of making mistakes. But their one minor mistake can cost you a fortune. Your financial stability may be irreparably damaged by bad or deceptive advice. It can be quite stressful and worrying.
Learn more about the impacts of financial negligence on the future in the later section.
Consequences of Financial Negligence: How It Impacts Your Future
Here are a few major consequences of financial negligence on your future:
- Financial Damage: Any bad or irreversible investment or financial advice can jeopardize you. If your financial advisor fails to analyze the market correctly and comes up with wrong predictions (all because they were negligent), your thousands or millions could be gone in a minute, just like that. Imagine if that was all the money you had, you could end up in the streets.
- Making Unwanted Financial Choices: Financial negligence can create economic distress in your life. It can compel you to make unwanted, difficult financial choices, like filing for bankruptcy or selling a property. Your market credibility will be gone, and no creditor will want to loan you funds.
- Low Retirement Savings: You can have fewer funds set aside for retirement if your financial advisor gives you lousy retirement savings advice. This can require you to put in more hours at work, retire with a reduced salary, or give up your desired standard of living.
- Stress: Financial carelessness can also result in tension and anxiety. Focusing on other elements of your life may be troublesome if you feel anxious about your financial well-being. This can adversely impact your relationships, job, and general health.
How To Prove My Financial Advisor’s Negligence Towards My Investments?
Professional negligence arises when a professional does not carry out his duties to an acceptable standard. The following may be the basis for a claim made by a professional client:
- Breach of statutory duty
- Breach of fiduciary duty.
- Breach of duty of care (in the case of negligence)
- Breach of a contractual term (express or implied).
You must prove there was a breach of an obligation when it is owed in contract or tort. You must demonstrate that the professional fell short of the expected standard.
In general, professional misconduct is proven if the mistake was one that no rational member of the same profession would have made under the same conditions. Claims can be made against the applicable financial adviser when such errors result in financial losses.
Examples of Financial Negligence Cases To Know About
The following are typical examples of possible claims:
- Failing to accurately assess a client’s financial status to properly advise on appropriate financial products.
- Giving erroneous, subpar, or substandard advice to someone looking to invest in or enter a financial product, such as a SIPP.
- Financial loss occurs due to failure to disclose the risks associated with a product or investment.
- Advising an investment in a (risky) financial instrument, such as CFDs, crypto-currencies, FX derivatives, LIBOR-linked products, etc., without accurately analysing the client’s attitude toward risk.
- Financial products are being mis-sold and failing to carry out a client’s directions.
Note: If you can relate your negligence case to any of these examples, discuss it with your financial advisor’s negligence lawyer.
How Does The Financial Negligence Claim Work in Australia?
The Australian Financial Complaints Authority (AFCA) addresses customer grievances against specific financial services providers, like financial advisors and mortgage brokers.
AFCA aims to fairly and impartially resolve conflicts while compensating individuals who suffer financial loss. However, more complicated disputes may call for far more specialized legal assistance. In that case, you’ll have to contact the best financial negligence lawyer in Perth.
Your lawyer can handle the financial negligence claim process without hassle. Nevertheless, there’s no harm in knowing the steps involved. Learning precisely what went wrong is the first step in this approach. The following actions your lawyer will take could include:
- Reviewing your records and any pertinent papers, as well as the recommendations made and decisions made.
- Sending a first letter to the subject’s or the company’s insurance providers.
- Make specific claims about your claim and get professional advice.
- Sending a formal claim letter.
Sometimes, a settlement happens after the fault is acknowledged. Others will contest responsibility. If so, we will investigate your claim for financial negligence.
If your financial advisor wronged you, and now you must face the consequences of financial negligence, it’s time to call the best Civil Lawyers in Perth. With the best financial negligence lawyer, file a claim and get suggestions on how to proceed.
If the measures specified in the Protocol do not result in a resolution or another option to settle the dispute outside of the courts, acting swiftly ensures that you do not exceed the deadline for filing a claim, should it become necessary.