Financial Advisers Duty of Care
- Arnold Shields
- Nov 5, 2009
- 2 min read
Updated: Jun 24
Suffering financial losses from an investment recommended by your financial adviser can be distressing, but it's important to understand that a poor outcome alone doesn’t necessarily mean the adviser acted negligently.
However, your financial adviser does owe you a legal duty of care. If they failed to provide advice with reasonable care and skill, or acted in their own interest rather than yours, they may have breached that duty.
Duty to Act in Your Best Interests
Under both the ASIC Act and the Corporations Act, financial advisers are required to:
Avoid misleading or deceptive conduct
Refrain from unconscionable behaviour
Not make false or misleading statements
Deliver services with due care and skill
Act efficiently, honestly and fairly
Base their advice on a reasonable understanding of your situation
Provide key compliance documents such as:
Financial Services Guides
Statements of Advice
Product Disclosure Statements (where applicable)
If your adviser recommended high-commission products over those suited to your financial goals, or failed to disclose relevant risks, this may amount to a breach of their legal and ethical obligations.
When Should You Seek Advice?
You should consider seeking legal or financial advice if:
You were advised to invest in a product that was clearly unsuitable for your financial situation
Your adviser failed to explain key risks or did not provide proper documentation
You suspect a conflict of interest, such as receiving undisclosed commissions
Need Help Reviewing Your Adviser’s Conduct?
At Dolman Bateman, we assist clients in reviewing financial advice and investment outcomes to determine whether a breach of duty has occurred.
Contact us today to book a confidential consultation.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
