More needs to be done for investors: Ombudsman

She is concerned that too much emphasis is going on law changes and tougher enforcement, and not enough is being done to provide investors with redress to poor advice.

In her submission to the Periodic Review Group, Brown says there is an absence of “any easily accessible means of redress for investors who have been given faulty advice about investing, or who have been persuaded to invest in a product that is not suitable for their needs.”

While the finger has been pointed at bank advisers on the back of reports from her office, Brown says they are not alone in providing bad or faulty advice.

“I have no doubt that there are others who have been affected by similar poor advice from advisers other than bank employees but who do not have accessible means to redress.”

She says an investor who has lost money as a result of faulty advice has no remedy except through the courts and may well be unable to afford the cost of court proceedings.”

In her submission, and a recent newsletter Brown highlighted the significant increase in complaints her office has received about bank advisers.

“Over the past 18 months I have had a very substantial increase in complaints made to me about the sale of investments products by banks.”

She says the losses are on the back of poor international share performance and subsequent losses.

Brown says in the year to June 2002 investment complaints and investigations have increased more than three-fold and the increase in 2003 is likely to be “substantially in excess” of the previous year.

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