Dragging your heels

Joe worked as an executive and had seen an adviser for financial advice for a number of years.

Between 2017 and 2018, Joe asked the adviser to arrange redundancy insurance to cover him should he lose his job.

Joe said that despite following up with the adviser a number of times, the adviser failed to provide him with any insurance options until April 2018. By this time, it was too late because Joe had received notice from his work that he would be made redundant.

 

Dispute

Joe complained that the adviser did not communicate with him in a timely manner and unreasonably delayed arranging suitable redundancy cover for him.

Joe claimed that the delay in obtaining suitable cover meant that the redundancy cover the adviser did finally find him could not provide him with any benefit due to a six month stand down period.

As compensation, Joe wanted Martin to pay him $24,000 in lost wages, and complained to FSCL.

 

Review

We reviewed the emails and phone records provided by the parties and observed that the notes kept by the financial adviser lacked clarity, accuracy and detail. We also found that the adviser had failed to keep adequate records of his meetings with Joe.

We found that the adviser had failed to take action in relation to arranging redundancy cover for Joe from June until late October 2017, and in doing so, had failed to exercise the care, diligence and skill of a reasonable financial adviser.

However, despite the adviser’s delay, we thought it was improbable that Joe would have agreed to changing his existing cover to include redundancy cover due to the additional expense. It followed that we did not think the adviser’s actions had caused Joe any financial loss.

We asked the adviser to pay Joe $1,000 to compensate him for the stress and inconvenience caused by the delay in his actions.

 

Resolution

Joe accepted our final decision and the adviser paid him $1,000 in full and final settlement of his complaint.

 

Insights

It is extremely important for financial advisers to keep a record of their meetings with clients and of the financial advice that they provide. It is best practice for financial advisers to follow up any meetings with an email outlining a summary of the advice given and action points to minimise any misunderstandings.

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