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Risks in financial services for consumers

The Senate Inquiry into ASIC (The Australian Securities and Investment Commission) has highlighted the risk that consumers face currently in the realm of financial services.

The risk is particularly high when lending organisations such as Banks are providing financial advice.

The risk is that financial advice will favor products provided by that lending organisation rather than being in the best interests of the client.

When obtaining financial advice ask the advisor:

• Are they charging a service fee?
• Will they receive a sales bonus?
• Will they receive any other benefit?

Test the advice by seeking clarification about the level of risk and the likelihood of suffering financial loss not just about the rate of possible return. Pose questions such as: Would I be better off paying off your existing debt rather than taking out a fancy product?

If you are in doubt about the advice obtain a second opinion.

If you have been incorrectly advised and have suffered loss you may make a complaint or you may have a claim in negligence against the advisor. We can assist you in determining if your losses are as a result of negligence and what is involved in making a claim.

If you require assistance regarding negligent advice provided from financial services please contact our Commercial Litigation team who can advise you if you have a valid claim.