Professional Negligence

Claims against IFAs

When you instruct an Independent Financial Advisor to invest your money, there are certain duties and standards that must be adhered to. If the value of your investment has fallen significantly and you were not prepared for this or if you have suffered a financial loss that you think should not have happened we can help you assess whether your IFA has been negligent.

We understand the financial devastation that can be caused by receiving negligent financial advice and we can offer ‘no-win no-fee’ options for suitable cases.

Do I have a claim against my IFA?

If you have engaged an IFA, it is likely that they will have owed you a ‘duty of care’. There does not need to be a written contract in place for the ‘duty of care’ to arise. The IFA’s ‘duty of care’ means that they must perform their responsibilities using reasonable skill and care. Your IFA must also act with independence, meaning that they cannot recommend one product and ignore other products that are available. If the IFA’s actions fell below the standard of a competent member of his profession or if they were not independent, they may have been negligent.

We can help you assess whether your IFA failed in his duty to you, typical examples of IFA negligence may include situations where:

  • Your IFA did not carry out an adequate ‘fact finding’ exercise to assess your attitude to risk;
  • You were exposed to a high risk or highly speculative investment that was totally inappropriate for you;
  • You were advised on an investment strategy but the risks were not explained to you;
  • You were sold investment products that your IFA should have known you didn’t need – such as transferring your pension resulting in unnecessary fees;
  • Your IFA failed to act independently;
  • Your IFA did not act in your best interests;
  • You were given inadequate investment advice or your investment was not properly monitored;
  • You were not told about the tax consequences of your scheme when you should have been

What is my claim worth?

If your IFA has been negligent, we will discuss with you what your likely loss has been. We can help you recover financial compensation (damages) that will put you in the position you would have been in if your IFA had not been negligent. Often the financial compensation will be substantial. Your losses would normally be paid for by your IFA’s professional indemnity insurance policy.

What is the procedure?

If we think that you have a claim against your IFA, we will write to them, setting out the legal basis for your claim and a summary of your loss. The letter is called a ‘pre-action letter’ and is the first step in the litigation process. The IFA will either accept your claim or send a ‘letter of response’, indicating whether they intend to defend the claim and on what basis. Often settlement is reached before a claim is issued at Court and most cases do not reach Court. If a resolution is not possible, we can discuss issuing a claim with you.

How much will it cost?

We are experienced at effectively managing the costs of pursuing or defending a professional negligence claim and we are able to act on a variety of different funding arrangements in order to help you pursue or defend your claim in the most effective and efficient way. At the outset, we will discuss with you the available funding options to ensure you are provided with the most suitable arrangement for your circumstances.

What should I do next?

Bolt Burdon has a specialist team dedicated to financial services disputes. We regularly take instructions from clients with concerns about their IFA’s actions. You may not even fully appreciate at this stage whether your investment was inappropriate or possibly illegal and we can help you determine this and discuss what options are available for you. We would be happy to discuss your case in more detail with you.

Our Professional Negligence Team

Natasha McKeever
I am a Partner and head of the Disputed Wills and Trusts Team. Read More
Back to top