We recently acted for clients who had suffered significant financial harm due to the professional negligence of their accountants and financial advisors (“financial advisors”). The matter involved advice given to our clients in relation to investments in various financial products including agricultural investments which were clearly not suited to the clients’ financial needs.
At the very core of this matter was that significant regard was not given by the financial advisers in relation to the suitability of the clients for the risk they would potentially have to bear. As our clients were not experienced in investments, they decided to trust that the financial advisers would look out for their interests.
The financial advisors clearly were not, and in fact were more concerned with obtaining substantial commissions rather than offering financial products which were better suited to our clients’ needs. The financial products invested in were such that a substantial income far in excess of what our clients were presently earning would be required to make the investments tax effective. This was a clear indication of the unsuitability of the financial advice given as they were in a period of transition where their income was in fact decreasing.
Tax reduction was not the main priority and in fact the main priorities of were to provide for income for the education of their children, to grow their capital, and increase wealth in real terms so that they could contemplate an early retirement and financial independence. Income from the financial products invested in were meagre in comparison to the loss of their capital invested. Losses in excess of $300,000 were incurred during the several years that the investments operated.
It was then that our clients decided to seek advice about their prospects of recovering funds from their financial planners to try to place themselves back in the position they would have been were it not for the negligent advices of the financial advisers.
A Claim and Statement of Claim in the District Court of Queensland was filed by our clients and this firm set about to pursue their financial advisers. Our clients were ultimately able to settle with the Insurers of the financial advisers on terms that adequately reimbursed them for their losses and costs.