The right financial advice can help you achieve your financial goals. However, it's important to know what to do if something goes wrong.
Signs you may have a problem
You may have problems with a financial adviser if they:
- seem to be pushing one solution, regardless of your needs (for example, an SMSF or borrowing to invest)
- pressure you to sign documents that you haven’t read or don’t understand
- give you advice that doesn’t fit with your goals or risk tolerance
- make you feel intimidated or uncomfortable if you ask questions
- are not upfront about how they make their money and the costs of the advice
- leave you in a worse financial position than before you received the advice
- charge you for advice that they never provide
Anyone who gives financial advice must have an Australian financial services (AFS) licence or work for a company that has a licence.
If you've lost money because your adviser acted illegally or gave you advice that was not suitable, you may get a refund.
What to do if you have a problem
If you're unhappy with financial advice you've received or fees you've paid, there are steps you can take.
Act quickly if the advice doesn't look right, or if you've paid for services that you didn't receive.
Talk to your adviser
The first step is to talk to your adviser. If it's about fees, ask them to explain their fees and what the fees are for. If you think the fees are too high, ask if they're willing to reduce them.
See our tips for working with a financial adviser.
Make a complaint
Internal dispute resolution
If you're not happy with your adviser's response, you can make a complaint through internal dispute resolution. Their Financial Services Guide tells you how to do this. It should be on their website, or you can ask them for a copy.
They must acknowledge the dispute within 14 days. They must respond to the dispute within 45 days. For more information, see internal dispute resolution tips from the Australian Financial Complaints Authority (AFCA).
Your adviser should work with you to sort out the problem.
Australian Financial Complaints Authority (AFCA)
If you're not satisfied with how your adviser has handled your complaint, you can contact AFCA.
AFCA is a free, independent service that helps resolve complaints from consumers and small businesses about financial service providers.
You should also complain to the adviser's industry association or professional body. To find out which one they belong to, see our financial advisers register.
Police and ASIC
If you suspect fraud or dishonesty, you should also contact your local police and report the misconduct to ASIC. An example would be your financial adviser has spent your money on their own expenses.
If your adviser is banned
ASIC can ban a financial adviser if they have done the wrong thing, such as:
- failing to act in the best interests of their client
- charging for services they have not provided
- providing false or misleading information
- giving advice that is not appropriate
- not being honest
Once an adviser is banned, they can no longer give you advice. They should contact you straight away to explain what will happen with your portfolio. They can allocate another adviser or you can choose someone else in the company. You can choose if you want to continue or end the relationship.
Ending your relationship
If you end your relationship with your adviser, make sure you:
- Let them know in writing, and keep a copy for your records.
- Cancel any authorities you've given them, for example, transaction authorities or access to bank accounts.
- Review the advice you've received from them. You can ask your new adviser to do this, using your Statement of Advice (SOA).
- Cancel the fees (or reallocate them to your new adviser).
If you decide to transfer to a new adviser, see choosing a financial adviser for what to look for.