Almost every one knows someone who has lost money with the recent collapse of Bridgecorp and other finance companies.
Turner Hopkins new Senior Associate, Andrew Hooker, has significant experience in the area of financial and insurance law and the roles of financial advisers.
He has been closely watching the media coverage of the collapse and in particular the role of financial advisers who advised clients to invest in these now failed companies.
There is of course no problem investing in the higher return companies such as Bridgecorp, as long as you understand that with return comes risk. And that is where the role of the financial adviser comes into play. Most financial advisers would make sure that their clients understood the risks associated with some of the higher return finance companies, and advise them to spread their investments accordingly.
But any advisers who recommended that a client invest in such organisations without explaining the associated risks, and ensuring that the client understood, should now rightly be concerned about his or her liability.
In recent media reports there have been cases of financial advisers who have, for example, allegedly told clients that investing in Bridgecorp was "as safe as a bank".
We have been contacted by a number of people who are asking us to look at recovery action against financial advisers, and it is likely that we will be commencing a group or class action.
Some of the cases are very sad, and when people have relied on advice from a financial adviser, they are entitled to assume that the adviser has thoroughly researched the investment, and fully informed them of their options, and risks.
All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers, for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.
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Published: Sat, Sep 1st, 2007