If you think your financial adviser has misled you or given you false advice, you're not powerless. There's a government service that can help you resolve the conflict and hopefully reach an outcome that both sides are happy with.
The Financial Ombudsmen Service is a federal-government funded body that is designed to resolve complaints made by consumers against financial advisers and financial services companies. It's a free service that aims to resolve disputes without the need for lengthy and costly legal proceedings.
To be able to access this service, your financial adviser must be a member of FOS. Most advisers are members because to be able to practice as a licensed financial adviser, they must be a member of a dispute resolution scheme. In Australia, FOS is the most common dispute resolution mechanism.
What should I do if I have a complaint about my financial adviser?
If you have a complaint about your adviser, the first thing you should do is contact their employer. All financial services companies must have an internal dispute resolution mechanism and following this process is your first port of call if a dispute arises. But if the internal dispute resolution system doesn't solve the matter to your satisfaction, the next step is to contact FOS, which will try to broker an agreement between both sides of the dispute. Contact FOS on 1300 78 08 08 for more information about how it handles complaints.
What sort of issues does FOS consider?
Assuming the internal dispute resolution mechanisms have failed, FOS will consider things like whether an adviser has breached a client's confidentiality or privacy rights, for example, by giving information about a client's finances to a third party, without the permission of the client to do so. FOS will also consider serious examples of misconduct, for example if an adviser invests in a financial product using a client's funds, without the permission of the client. It also looks at whether a financial adviser has made adequate disclosures to a client about the levels of risk associated with a financial product.
The claims FOS investigates must relate to transactions valued at less than $280,000. Some of the complaints FOS doesn't look at include things like issues to do with interest rates, loan approvals and stolen credit cards.
If you think you have a legitimate complaint against a financial adviser and the adviser's internal dispute resolution mechanism has failed, go to the FOS website to find out more information about its terms of reference and processes. FOS also keeps its website updated with topical financial services issues - for example how complaints against the failed managed investment scheme Great Southern Plantation are being handled.
It's worthwhile checking the FOS site regularly to find out where to go if you were an investor or client of one of the number of financial services companies that have failed over the past couple of years.
