Compensation for negligent financial adviser advice
Need advice? Contact us for a no-obligation initial assessment to give you an understanding of the merits of your potential claim
What our clients say about us…
Pursuing professional negligence claims against financial advisers
Financial advisers are usually instructed by individuals to advise on investments like stocks and shares, unit trusts, open-ended investment companies, investment trusts and personal pension schemes to name but a few.
A financial adviser owes a duty of care to each of their clients in contract and under common law but also a statutory duty under the Financial Services and Markets Act 2000 to perform their work with reasonable care and skill. If they fail to do this and you suffer a loss as a result, then you may be able to bring a claim for professional negligence and/or breach of statutory duty.
There are usually two types of financial adviser:
- An independent adviser; and
- A tied agent.
An independent adviser is just that: independent. They should provide independent, objective advice and most importantly can offer advice on a number of different financial products in the market. A tied agent usually only offers products to which they are “tied”, for example, a bank mortgage adviser will only recommend products from the bank or building society for which they work.
In order to bring a professional negligence claim against a financial adviser you are required to prove that the financial adviser has breached the duties referred to above. To do this it is usual for a client to obtain a report from another financial adviser to comment on whether the work undertaken fell below the standard to be expected of a reasonable financial adviser. This is something we can discuss and provide assistance in obtaining.
Examples of negligence claims against financial advisers
The list below is not intended to be exhaustive so if you think you have a professional negligence claim against your financial adviser, and you cannot see an example below, please contact us for a no-obligation initial telephone assessment.
- Advising individuals about personal pensions, making recommendations to transfer one pension from an existing structure to another more unsuitable structure and executing the same. Financial advisers should take care to ensure they understand their client’s needs and discuss with them the suitability of the pension investments they are making.
- Misrepresenting the recommended investment, meaning that the client entered into an investment based on incorrect (or sometimes misleading) advice.
- Failing to consider the client’s personal position, their attitude to risk and their requirements and advising them to invest in inappropriate investments (usually high-risk unregulated collective investment schemes).
- In certain circumstances, a financial adviser will receive a commission when they sell a financial product to a client. Where that commission is not declared the client may have a claim against the financial adviser.
How our solicitors can assist
Professional negligence claims against financial advisers can be brought by both individuals and businesses alike. At Nelsons, we have an experienced team of solicitors, led by Partner, Daniel Brumpton, who specialises in professional negligence claims and can help guide you through your claim from start to finish.
We have acted in numerous claims against financial advisers, for example:
- We acted for a husband and wife who had been advised to invest all their savings in one toxic fund. We were able to bring a claim against the financial adviser and successfully settled the claim at mediation.
- We acted for an individual who had been advised to transfer his pension from one provider to another when the return from the new pension fund was not as good as the old one. We were able to bring a successful claim against the financial adviser who recommended the transfer for the difference between what the pension fund was worth and what it should have been worth had he remained in the old fund.
- We acted for several individuals who were advised to invest in open-ended investment schemes which were clearly unsuitable for their needs.
- We acted for an individual in relation to negligent advice about the operation and implementation of structured products.
- We acted for a number of individuals pursuing claims against the now-defunct, Arch Cru.
For more information about making a claim against your financial adviser, please contact our expert team of professional negligence claims solicitors in Derby, Leicester and Nottingham via our online enquiry form or call 0800 024 1976 for a guaranteed response.
“Nelsons...client roster includes high-net-worth individuals, sports professionals and property businesses. It handles claims against solicitors and barristers, financial advisers, insurance brokers, surveyors and architects, among others. It has a notable specialism in defending professionals against claims where there is no insurance cover in place or where cover has been reserved. Although it predominantly acts for claimants, the team is also engaged by insurance companies on the defendant side.”The Legal 500