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Financial Adviser Negligence

Financial Adviser negligence often leads to a loss of investment by the client, which should never have occurred.

What is Financial Adviser Negligence?

We naturally expect that our financial advisers will provide us with the correct, expert advice, but unfortunately, this is not always the case.

Like any professional negligence case, financial negligence occurs when the financial adviser falls below the expected standard of care, known as ‘duty of care,’ owed to their client.

Experts in financial adviser negligence

Mistakes made by financial advisers and Banks often include mis-sold financial products and schemes such as:

Tax mitigation schemes

For example, a failure to advise properly in relation to the risk of HMRC attacking the scheme and serving Advance Payment Notices.

Interest rate swap agreements

An interest rate swap agreement is a complex financial product which was designed to protect the customer against rising interest rates.

Many banks advised customers to swap their existing loan for a fixed-rate loan to protect them from higher interest rates, but what the banks did not tell the customer was the consequences if the interest rate dropped which it did.

You or your business may have been mis-sold an interest rate swap agreement if:

  • The bank did not explain the agreement and the consequences of the agreement if the interest rate dropped.
  • The bank failed to properly consider the needs of the customer and whether the products being offered were suitable for the individual or business.
  • The Bank failed to explain at the outset of the agreement the high costs of terminating the agreement.
  • The interest rate swap agreement was longer than the original loan it was replacing.
  • The bank did not explain the exit fees should you terminate the agreement.

Insurance products

For example, life insurance unsuitable to the client’s needs or the financial adviser failed to explain to the consumer how the policy works and that reviews would take place and what the consequences might be (increased contributions or reduced sum assured).


For example, the product did not suit the investor’s attitude to risk as it was a high risk for a retired person wanting low/medium risk.


For example, where pension savers were sold annuities that did not take into account their poor health/lifestyle or were poor value annuities with better products elsewhere.


For example, the mortgage end date is after the borrower’s retirement date or non-disclosure of fees, commission or penalties.

Equity release schemes

For example, a failure to warn about spiralling interest costs (typically the debt doubles every 10 years) and other costs such as substantial early repayment charges.

Packaged bank accounts

These are current accounts which are meant to provide extra packaged ‘benefits’. For example travel and mobile insurance. You may have paid or are currently paying a monthly fee for a packaged bank account that you were negligently sold or does not benefit you.

You may have been mis-sold a packaged bank account if:

  • You were told to open a packaged bank account to obtain a loan, mortgage or overdraft.
  • You were sold extra features, for example, mobile phone and travel insurance that do not benefit you.
  • You were mis-led or pressured into opening the account.
  • The cost of the account was not explained to you.
  • You requested to cancel the account but were refused.

Incomplete or inaccurate information

In mis-sold claims, the basis of the claim is usually that the promoter or financial adviser of the scheme has provided incomplete or inaccurate information.

This could also mean that the financial adviser has provided inaccurate or negligent advice regarding how suitable the product is, as well as explain all the risk and consequences.

It is essential that the financial adviser knows his client and has taken reasonable steps to ensure his client understood the product or scheme and the potential downsides and it is in these areas that the professional can be found to be wanting.

Other areas where financial adviser negligence could have occurred include the financial mismanagement of financial investments by professionals such as hedge fund managers.

Fraud and negligence

You may be an unfortunate victim of fraud and you may feel that your financial adviser should have done more to spot the fraud and should have alerted you to the fraudulent activity before you lost your money.

While the professional may have become unwittingly involved in the fraudulent scheme and be innocent of any dishonesty, it is possible that the professional is liable to you for your loss as his negligence resulted in less information being obtained which could have led to the unravelling of the fraud.

The financial adviser could have been a lawyer acting for someone pretending to be the true owner of the house you wanted to buy or the lawyer acting for you in this purchase when it turns out that a bogus vendor has stolen the identity of the real owner and your money.

The professional could have been an accountant who acted negligently when they advised you on the purchase of a business and failed to spot that the accounts were dishonest.

If you feel you have been the victim to financial adviser negligence, get in touch with Specters Solicitors on 0300 303 3629 for a free initial, expert consultation.

We will be able to assess your situation and provide you with your best options moving forward, which is likely to involve a no win no fee agreement should you choose our firm.

To get in touch with the Specters team, submit an enquiry below or call us on 0300 303 3629.

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