Communication key to avoiding adviser negligence
As breaches of superannuation contributions caps hit an all-time high, advisers must be more vigilant in shifting the liability from themselves onto their clients in order to avoid personal negligence claims, according to an industry expert.
Speaking at a Macquarie briefing yesterday, Argyle Lawyers principal Peter Bobbin (pictured) said the best way for an adviser to avoid personal negligence was to communicate the dangers of exceeding super caps with their client repeatedly.
“So you alert the client, you urge the client, you encourage the client – but what you are doing is you are shifting the liability,” he said.
“I can assure you that the first person a lawyer acting for a client will look to is an adviser and ask, ‘Can I attribute the blame there?’”
In order to avoid this risk, Bobbin said that part of his role with Macquarie had been to create an adviser alert on what to do when a client looks like they will exceed super caps, which will be available in the near future.
Bobbin urged advisers to act now, since the end of the financial year was fast approaching.
“Tell the public and tell them now, because they’ve got three months to look at whatever contributions they’ve made in the last three years,” he said.
AUTHOR
Ashleigh McIntyre
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
