“Owing investors approximately $9 million (17-246MR). Many of the investors were pensioners and were approached by telemarketing or word of mouth. Investors were convinced to borrow against their homes and were told that their money would be used to develop property in Tasmania. Instead, the money paid by investors was used to pay back interest owed to other investors, payments to employees, cash withdrawals and transfers to personal bank accounts.”
Hon. Bernie Ripoll, Consumer Advocate for Financial Rescue explaining the Financial Ombudsman Service as the Royal Commission starts its inquiry into financial advice. #banksRC
The introduction of the Best Interest Duty in 2013 as part of the Future of Financial Planning reforms (FoFA) stipulates that financial planners must act in the best interest of their clients. While the Best Interest Duty has had an overwhelmingly positive effect, there are still a number of financial advisers being reported by ASIC who have not been compliant, and consumers should be aware of what to look out for to avoid these rogue financial advisers.