PROBLEMS WITH YOUR ADVISER

It’s important to know how to protect yourself from fraud or other forms of misconduct by a financial adviser, what to do if your adviser has been banned, and how to complain about a financial adviser.

Protecting your investments

Even if you trust your adviser, it’s not a good idea to give them control over your money. Keep control over your finances and avoid potential fraud by:

  • Never giving your adviser a Power of Attorney (POA). Reputable advisers won’t ask you to do this
  • Never signing blank documents, for anyone
  • Setting boundaries. For example, if you do give your adviser authority to buy and sell investments on your behalf, put a time limit on the authority, rather than leaving it open-ended.
  • Keeping paperwork and tracking investments. Keep statements and other documents in one place, so it’s easier to keep track of your money. Make sure you receive all mail or emails about your investments (even if your adviser also gets a copy), and check statements for mistakes
  • Never writing cheques payable to your adviser, or transferring money to your adviser electronically, if the money will be used for investments. Pay the product provider directly
  • Double checking electronic payments to make sure the account number or BPAY number and reference details for any electronic payments are correct

Protect yourself from fraud

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

Unhappy with the advice you received?

If you’re unhappy with any aspect of the advice or service you receive, try to talk it over with the adviser. If you’re not happy with the fees you are being charged, see if they are willing to renegotiate their fees.

If you are still not satisfied (or your adviser won’t meet with you), make a complaint through the adviser’s internal dispute resolution system, and consider looking for a new adviser. Your adviser’s financial services guide will tell you how to make a complaint.

You should receive an acknowledgement letter of internal dispute within 14 days. The advice provider has 45 days to give you a final response.

If you’re unhappy with the response, you can contact the Australian Financial Complaints Authority (AFCA).

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.

If the advice has left you in a worse financial position than before you received it, you can ask to have your advice reviewed. You may be entitled to a remediation payment if the advice is found to be inappropriate for your circumstances or you suffered a loss as a result of a criminal act by your adviser.

What to do if your financial adviser has been banned

There are a number of reasons why a financial adviser may be banned from providing financial advice, including:

  • failing to act in the best interests of their client
  • charging for services they have not provided
  • providing false or misleading information
  • giving inappropriate advice
  • acting dishonestly

If your financial adviser has been banned from providing advice, they can no longer give you advice on financial products or services; however, they can offer you the services of another adviser working under the same Australian financial services (AFS) licence.

If your banned adviser contacts you about providing financial advice, ask them to stop calling you and make a complaint to ASIC. You can also let your new adviser know, if you have one.

Find out why the adviser has been banned

If your adviser was banned from providing financial advice, read ASIC’s media release about the banning to find out why. This may help you work out whether the advice you received was appropriate.

Cancel any authorities you have given

If your adviser has been banned, immediately cancel any authorities you have given them, such as a power of attorney, access to online accounts or authorities to transact on your behalf. Let your adviser know, in writing, that you have cancelled all such authorities, effect immediately. Make sure all correspondence regarding your investments comes to you and not the adviser.

Review the advice you’ve been given

If you are concerned about the advice provided by the banned adviser, ask the advice firm to review it. If you don’t have your Statement of Advice (SOA), request a copy from your adviser or their advice firm.

If your advice has been part of a review process, you can ask the advice firm what they found and how they plan to rectify any inappropriate advice. If you’re not happy with the company’s response, contact their external dispute resolution scheme.

When reviewing the advice you received, consider whether it:

  • accurately describes your financial situation, goals and attitude towards risk
  • offers more than one option and explains the pros and cons of each one
  • explains how recommended products fit your overall strategy
  • sets out all the fees you will pay (in dollars), and when they are payable.

Check the ongoing advice fees you are paying

If you pay an ongoing advice fee to the adviser, you may be allocated another adviser within the advice firm. If you’re not happy with this arrangement, you can opt out of paying ongoing advice fees and perhaps consider choosing another adviser.

Choosing a new financial adviser

If you want to continue getting advice from the same advice firm, you can allow them to allocate a new adviser to you. You don’t have to accept the new adviser; you can do your own research and interview the new adviser to make sure they are the right fit for you.

You may choose to start fresh with a new financial adviser from a different advice firm.