Adviser ordered to pay $1,000 after 'dragging heels'
A client who said his insurance adviser took too long to arrange redundancy cover for him has taken his complaint to FSCL.
Friday, September 13th 2019, 9:44AM 
1 Comment
The man had been working as an executive and dealing with an adviser for a number of years.
Between 2017 and 2018, he asked his adviser to arrange redundancy insurance to cover him should he lose his job.
He said he followed up a number of times but was not given any options until April 2018. By this time, it was too late because he’d already been told he was being made redundant.
He complained his adviser did not communicate with him in a timely manner and unreasonably delayed arranging suitable redundancy cover.
He said the delay meant the cover the adviser finally did give him did not provide any benefit through a six-month standdown period.
He wanted his adviser to pay $24,000 in lost wages.
“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,” FSCL said.
“We also found that the adviser had failed to keep adequate records of his meetings with [the client]. We found that the adviser had failed to take action in relation to arranging redundancy cover … 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 [the client] 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 [him] any financial loss.”
The adviser was asked to pay $1,000 to compensate him for the stress and inconvenience caused.
The client accepted that decision and the adviser paid him $1,000 in full and final settlement of his complaint.
“It is extremely important for financial advisers to keep a record of their meetings with clients and of the financial advice that they provide,” FSCL said. “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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That's rare. It's almost like he knew he'd need it. Which would create problems with certain questions on the application form.
So had the adviser arranged the cover, it might have also ended up at FSCL.
Either way then, this client was a ticking time bomb.