Determination - 7 January 2014

Key issue: Inappropriate inancial advice

Summary of Determination

I find that:

  1. in September 2006, February 2007 and January 2008, the FSP’s authorised representative provided inappropriate financial advice to the complainant, in breach of its obligation under s 945A(1) of the  Corporations Act 2001 (Cth);
  2. this inappropriate advice led to, amongst other things, the complainant investing in several unlisted property trusts at levels which far exceeded the complainant’s tolerance for risk (and the FSP’s own benchmark for an investor in the complainant’s position); and
  3. had this inappropriate advice not been provided, it is likely that the complainant would not have invested in this particular asset class at the levels that she did, and would not have suffered the losses on those investments that she has.
Consequently, I order the FSP to pay the complainant the sum of $189,112 in compensation for financial loss caused by the conduct of its representative.

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