Legal action against financial planners for giving poor advice is on the increase, according to a principal with law firm Maurice Blackburn.
“We’ve got a lot of financial planning and financial advice disputes or litigation on the go at the moment. I’m certainly seeing more and more of it,” Maurice Blackburn principal John Berrill said.
The current trend is a result of more people scrutinising their circumstances in the aftermath of the global financial crisis (GFC), he said.
“The industry will tell you people are just being opportunistic because they don’t say anything while things are good, they only tell you when things go bad like now, post-GFC,” Berrill said.
“But all the post-GFC situations have done is expose the rorts and expose the poor advice given. These things remain hidden until the losses accrue,” he added.
“So it’s not the people being opportunistic, it’s just that a fundamental flaw in the whole system has been exposed.”
In response to the announcement made earlier in the month that Commonwealth Financial Planning will be compensating the former clients of one of its authorised representatives who lost money due to poor advice received, Berrill urged individuals to be cautious.
“There are going to be a number of grey areas in this that will have to be nutted out by ASIC in agreement with Commonwealth Financial Planning,” he said.
“All I’d say to people is that they need to get proper advice when dealing with these issues to make sure they don’t get dudded in the process.”
