By: Kris Smith

Slater & Gordon is investigating compensation claims on behalf of investors who received financial advice from Commonwealth Financial Planning and Financial Wisdom, subsidiaries of the Commonwealth Bank of Australia. Slater & Gordon has extensive experience in acting for people who have suffered loss as a result of poor financial advice. Below is a recent example of a professional negligence case run by Slater & Gordon.

Loss of superannuation income stream

Slater & Gordon acted for a retiree who was receiving a pension from his superannuation fund. Our client wanted to supplement this income with a regular income stream and sought advice from a financial adviser.

Our client told his financial adviser that he wanted a conservative and diverse portfolio because he was concerned about losing his capital. He also wanted some flexibility to changes his investments to suit his personal circumstances.

Our client's funds were invested in a managed investment scheme (the Fund) that carried a risk of loss of capital and prevented him from accessing his funds until the conclusion of a fixed term. After the initial investment term expired, our client rolled over his funds for a further term at the recommendation of his financial adviser.

While his funds were invested in the Fund, the Fund ceased making distribution payments and all withdrawals from the Fund were frozen. This resulted in our client being unable to access his funds and the income stream from his investment ceased.

Slater & Gordon argued that had our client been properly advised of the risks associated with the Fund, he would not have invested in the Fund or rolled his funds over for a further term. Instead, he would have invested in a less risky product that protected his capital.

When our client first contacted Slater & Gordon, he had lost almost all of his initial investment as well as the opportunity to invest his money in a more appropriate product or portfolio.

Upon reviewing the claim, our lawyers identified that the financial adviser had breached a number of duties it owed to our client. In particular, the financial advisor failed to:

  • exercise reasonable care in providing financial advice to our client,
  • identify and advise our client of the risks associated with the Fund; and
  • assess whether the Fund was appropriate for our client having regard to his personal circumstances.

With the help of our legal team, our client resolved his claim against the financial adviser and received compensation for the financial losses he had suffered as a result of the financial adviser's negligent advice.

People wishing to obtain independent advice regarding their claims against Commonwealth Financial Planning and Financial Wisdom or seeking further information about our investigation should contact us as soon as possible.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.