When someone seeks investment advice from a bank or other financial institution, they usually expect this information to benefit them. In many cases, those attempting to obtain this form of guidance have little knowledge of the subject area and, consequently, rely on financial advisers to keep their best interests at heart.
However, when bad investment advice results in financial loss, those adversely affected should seek legal advice from an experienced professional negligence solicitor.
In the majority of cases, financial advisers adhere to very high standards of care. However, previous research, published in 2013, has suggested that some companies may be frequently issuing inadequate investment information.
After conducting a series of mystery shops across several banking firms, the Financial Services Authority (FSA) revealed that 25% of those companies may be giving poor investment advice. Moreover, the organisation stated that, in 11% of cases, this information was “unsuitable”.
When looking at the FSA’s findings in more detail, the research also showed:
- The advice, in 13% of cases, failed to take the financial requirements or personal needs of the customer into account;
- In 15% of cases, this information did not consider the amount of risk which the client was prepared to make; and
- The consumer may not have been asked how long they wanted to hold the investment for in 6% of cases.
If seeking information from an independent financial adviser, the Investors Chronicle states individuals can take various precautions in order to minimise their chances of receiving poor quality advice, such as making sure the seller conducts a risk assessment, asking the professional plenty of relevant questions, and recognising that if the information appears ‘too good to be true’, then it probably is.
However, when a customer receives poor quality investment advice from a financial expert, then he or she may be able to make a professional negligence compensation claim if they were adversely affected by this information.
Professional negligence claims with Healys LLP
If you suffered financial loss after receiving poor quality investment information, you should seek legal advice from Healys LLP today.
Although this is a specialist area of law, our team of experienced and hard-working solicitors – based in London and Brighton – can determine if your claim is likely to succeed.
Please call us today for more information.