Disclosure

Marita Wall, Hayley Pope and Philip Campbell

Adviser provides SOA to client. The SOA:– details fees and client’s objectives– doesn’t link objectives and recommendations– doesn’t discuss risk of products recommended

Adviser tells client about relevant risks Client signs SOA (stating she read the PDS) but

now says she didn’t read SOA or PDS Investment fails. Client complains – advice

inappropriate and no risk disclosure

1. SOA

Applicant must show:– breach– there was a direct loss– the breach caused the loss.

Argue contributory negligence in the alternative Onus

SOA

Fact Find completed and signed by client PDS provided to client SOA given to client and signed Client says he was rushed into it, he didn’t

understand the risks and nothing was explained to him by the adviser

2. Verbal Disclosure

Low income/asset client assessed as conservative investor but she wants high income strategy

Client’s brother made a fortune from margin lending and she adamantly instructs that she wants double gearing

Adviser includes these instructions in SOA Client loses everything, including her house

3. Clear Instructions

Adviser recommends 6 products in SOA Client only invests in 3 of those products 2 of those investments fail Client claims that those 2 investments were not

appropriate

4. Cherry Picker

Adviser approached for advice for $50,000 inheritance

Limited advice provided to invest in a platform of managed funds

Client claims that the advice was inappropriate and she should have been advised to pay off her mortgage

5. Limited Advice

Client aged 50 seeks financial advice. His current assets of $150,000 are invested in a defined benefit superannuation fund

Advised in SOA to sets up a SMSF to invest in a recommended portfolio of managed funds

Client claims unsuitable advice and inadequate risk disclosure after losses in the underlying assets

6. Superannuation advice

The initial advice was appropriate Client opted out of ongoing service in SOA At the beginning of the GFC, the Client kept

ringing the adviser but he said not to worry Client complains that she was misled - adviser

should have told her to redeem

7. Ongoing Advice