In my opinion this has been a long time coming and it is about time it happened.
I also think we will see more of it in the future especially as new regulation comes in.
In what has been regarded a landmark case, a client has been awarded compensation of around $250,000 by the court for “negligence and breach of fiduciary duty” by her financial adviser. The judge in the case said, “It is apparent that the advice Mrs Breeze received was wholly deficient for the circumstances. The defendant (VPFS) has been Mrs Breeze’s adviser for some years, and knew her position and her investment profile”.
“It was an unsuitable investment for her, and obviously so. Even if everything went well, the maximisation of gains was some years down the track. Bearing in mind Mrs Breeze’s age and immediate needs, it was not an appropriate investment. It put at risk her one significant asset, namely her home”.
This is yet another case where things go wrong, not primarily because the product failed, but because the adviser failed to make recommendations that were appropriate for the client’s circumstances.
It is proper process leading to justifiable recommendations that is the mark of a professional.
