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INDUSTRY NEGLIGENCE HUB
When you hand your financial future to a professional, you’re not just trusting their qualifications. You’re trusting their judgement. Their honesty. Their obligation to put your interests first.
Unsuitable investment products. Retirement savings wiped out by a strategy that was never appropriate. A mortgage you couldn’t service, recommended by a broker who knew the numbers didn’t stack up. A conflict of interest that was never disclosed. These aren’t market outcomes — they’re professional failures. And in Australia, the law provides a pathway to hold those professionals accountable.
UNDERSTANDING THE CLAIM
Financial services negligence occurs when a licensed financial professional — someone holding an Australian Financial Services Licence (AFSL) or operating as an authorised representative — fails to meet the standard of care owed to their client, and that failure causes measurable financial loss. It is not simply a bad market outcome. The question is whether the professional acted as a reasonably competent person in their role would have acted, and whether their failure to do so cost you something real.
Under the Corporations Act 2001 (Cth), financial advisers are bound by statutory obligations — including a best interests duty under section 961B — that sit alongside common law negligence principles. Breaching those obligations can give rise to a civil claim, independently of any complaint made to the Australian Financial Complaints Authority (AFCA).
AFCA complaint vs civil negligence claim. An AFCA complaint is a regulatory process with a compensation cap. A civil negligence claim in the Federal Court or a state Supreme Court carries no ceiling on what you can recover. The two pathways are not the same — and FGA helps claimants pursue the civil route where the loss warrants it.
WHO CAN BE HELD ACCOUNTABLE
The financial services sector is broad — and so is the scope of who can be held accountable when advice goes wrong. If your situation involved any of the following, it is worth having it assessed.
Unsuitable product recommendations, failure to disclose conflicts of interest, inappropriate risk strategies — these patterns are well-documented in Australian financial services litigation.
Brokers owe a duty to recommend loans that genuinely suit the client's circumstances. Failing to conduct a proper needs assessment — or placing someone in a loan they cannot service — can give rise to a negligence claim.
Discretionary authority over a client's portfolio carries a high standard of care. Trading beyond mandate, failing to diversify, or churning a portfolio to generate commissions are recognised forms of negligence.
Recommending a policy with exclusions the client was never told about — and finding out only when a claim is denied — is a professional failure with serious consequences.
Advice to concentrate an entire fund in a single asset class, or guidance that inadvertently renders a fund non-compliant, can leave members facing retirement with nothing left.
Responsible lending obligations are not optional. Recommending credit products that are unsuitable, or failing to properly assess serviceability, can constitute both a statutory breach and common law negligence.
Where an accountant steps into a financial planning role without appropriate AFSL authorisation — or advises outside their competence — they can be held to account under negligence principles and ASIC's licensing framework.
REAL SITUATIONS, NOT HYPOTHETICALS
These are the kinds of situations that bring people through our door. Specific, recognisable — and each one legally actionable where the facts support it.
A planner and a retiree’s savings
A financial planner recommends a high-risk property investment scheme to a client two years from retirement. The client’s stated risk profile was conservative. The fund collapses. Three hundred thousand dollars of superannuation — gone.
A mortgage that shouldn’t have been written
A mortgage broker arranges finance for a family that cannot reasonably service the loan. No genuine needs assessment is conducted. Within two years the repayments become unmanageable. The family loses their home.
Discretionary trading gone wrong
A stockbroker holds discretionary authority over a client’s portfolio. Over eighteen months they execute trades at a volume that generates significant commissions — for the broker — while the portfolio’s value steadily deteriorates.
A conflict of interest never disclosed
A financial adviser recommends switching the client into a managed fund that pays the adviser’s dealer group a substantially higher trailing commission. The conflict of interest is never disclosed — a clear breach of s961B of the Corporations Act.
An SMSF concentrated into one failing trust
An SMSF adviser recommends concentrating the entire fund balance in a single unlisted property trust. The trust fails. The members are left with a non-compliant fund and no retirement savings.
Insurance that didn’t cover what it should
An insurance adviser places a client in a life policy without properly exploring their medical history. When the client later makes a claim, the insurer voids the policy for non-disclosure. The client believed they were covered.
YOUR LEGAL RIGHTS
Financial services negligence claims in Australia draw on two overlapping bodies of law. Understanding both is important — because they provide different pathways to recovery.
Common law negligence
Four elements must be established: duty of care, breach, causation, and quantifiable loss. The High Court confirmed in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 that advisers making representations on which another relies can owe a duty of care. Where a breach deprived you of a real and substantial chance of a better financial outcome, Australian courts have awarded compensation under the loss of a chance doctrine.
Statutory obligations
The Corporations Act 2001 (Cth) Part 7.7A imposes a best interests duty on licensed financial advisers. The ASIC Act 2001 (Cth) separately prohibits misleading or deceptive conduct in connection with financial services. These statutory obligations run alongside — and in some cases strengthen — a common law negligence claim.
AFCA complaint vs civil claim
AFCA is free and accessible, but its compensation cap (currently $542,500 for retail clients) means larger losses may be inadequately addressed. A civil claim in the Federal Court or a state Supreme Court carries no statutory cap. FGA helps claimants pursue the civil pathway where the loss warrants it.
TIME IS CRITICAL
Financial services negligence claims are subject to limitation periods that vary by state. In most states the general rule is three years from the date you became aware — or reasonably ought to have become aware — of the negligence. In some states a six-year period applies to claims framed in contract.
The discovery rule is particularly significant in financial services matters. Negligent advice is often not apparent at the time it is given — you may not discover the problem until a fund fails, a claim is denied, or you seek a second opinion. That discovery date is typically when the clock starts.
Act before time runs out.
Financial services negligence claims in Australia are generally subject to limitation periods of 3 to 6 years, depending on your state and the nature of the claim. The clock typically starts from the date you became aware — or reasonably should have become aware — of the negligence. Missing this deadline can permanently extinguish your right to claim. Do not assume time is still on your side. Contact our team for a free assessment as soon as possible.
COULD THIS APPLY TO YOU?
These four threshold questions map directly to the legal elements a court would consider. If you can answer yes to all four, there is a real basis for a claim. If you are uncertain on any point, that is precisely what a free case evaluation is designed to assess.
✓A licensed financial professional provided advice or services to you
✓The advice or services fell below the standard a competent professional in their position would have provided
✓You relied on that advice or services when making a financial decision
✓You suffered a measurable financial loss that would not have occurred had the advice been competent
WHAT YOU MAY BE ENTITLED TO
The types of loss recoverable depend on your circumstances. Quantifying economic loss in financial services negligence matters typically requires engagement of a financial loss expert alongside legal counsel. The following heads of loss may be available depending on your situation.
Direct financial loss
The capital lost through unsuitable investments, a failed strategy, or a product that was never appropriate for your situation. The most common head of loss in these claims.
Lost investment returns
The returns you would have earned had the advice been competent. Australian courts have awarded this under the loss of a chance doctrine where a claimant was deprived of a real and substantial chance of a better outcome.
Consequential losses
Downstream losses caused by the negligence — being forced to delay retirement, losing a business opportunity, or other financial impacts that flow from the original failure.
Pre-judgment interest
Applied to quantified losses from the date the cause of action arose.
Legal costs
Recoverable in appropriate cases where the matter proceeds to judgment.
WHY FAIR GO AUSTRALIA
Professional negligence is the whole practice — not a corner of it. When your matter involves the Corporations Act, AFSL obligations, or AFCA’s jurisdiction, you need a team that already understands that landscape. Not one that needs to be briefed on it.
Our no-win, no-fee model means you are not asked to fund litigation out of pocket. We carry the financial risk alongside you. If the claim does not succeed, you do not pay our fees. That is a commitment — not a marketing line.
We operate Australia-wide. Financial services advice is national, and the harm it causes does not respect state borders. Whether you are in Sydney, Perth, regional Queensland, or anywhere else, we can help.
TAKE THE FIRST STEP
If you have lost money because a financial professional failed you, the worst thing you can do is wait. Time limits are real. Evidence becomes harder to gather. Our free case evaluation is confidential, carries no obligation, and is conducted by people who understand financial services law. We respond within one business day.
FREQUENTLY ASKED QUESTIONS
An AFCA complaint is a free, accessible process administered by the Australian Financial Complaints Authority. It is a good first step for smaller losses, but AFCA’s compensation cap — currently $542,500 for retail clients — means it may not fully address serious financial harm. A civil negligence claim in the Federal Court or a state Supreme Court carries no cap. The two processes are not mutually exclusive, and an AFCA determination does not necessarily prevent you from pursuing further legal action.
Possibly, yes. Licensed financial services businesses are generally required to hold professional indemnity insurance. Where a business has closed, claims may still be pursued against the insurer, a successor entity, or in some cases the individual adviser. The position depends on your specific circumstances and is worth exploring as a matter of priority given limitation period concerns.
Proof typically involves establishing what advice was given, what your circumstances and risk profile were at the time, and what a reasonably competent adviser in the same position ought to have recommended. This usually requires independent expert evidence from a financial planning professional who can assess the conduct against industry standards. We can guide you through what evidence is needed and how to obtain it.
The best interests duty under section 961B of the Corporations Act 2001 (Cth) requires licensed financial advisers to act in the client’s best interests when providing personal advice. It is a specific procedural and substantive standard. Where an adviser recommended a product that did not suit your needs, failed to investigate your circumstances properly, or prioritised their own financial interest, they may have breached this duty — giving rise to both a statutory claim and a common law negligence claim.
Yes, in appropriate cases. Negligent advice about superannuation strategy — including SMSF advice — can give rise to a claim. The fact that losses occurred within a superannuation structure does not, of itself, prevent recovery. There are additional considerations around who has standing to bring the claim, but these can be worked through during the free case evaluation.
Not necessarily. Risk disclosure documents are a common part of financial services agreements, but they do not provide blanket protection against negligence. If the advice was fundamentally unsuitable for your circumstances, if a conflict of interest was concealed, or if the risk disclosure itself was inadequate or misleading, those documents may not shield the adviser from liability. This is a question best assessed with legal advice specific to your documents.
It varies considerably. Matters that settle through negotiation — the majority — can resolve within twelve to eighteen months of a claim being formally made. Matters that proceed to hearing can take longer, particularly in the Federal Court. Your legal team will give you a realistic picture of the timeline based on the specifics of your matter.
Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation.
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