Ripoll changes will increase client litigation
If the recommendations of the Ripoll Inquiry are adopted it will become easier for clients to make claims against their advisers, according to corporate lawyer Peter Townsend.
He added that at the moment clients can only instigate litigation if they believe the advice they have received is unsatisfactory — that is, if an inappropriate product has been recommended, if the adviser has been incompetent or if there has been ineffective disclosure.
Townsend said that while it is currently difficult for clients to make claims against their advisers, the Ripoll proposals will place the burden of proof squarely upon advisers.
Townsend warned that if the Government adopts the changes, dealer groups will have to ensure that the client’s expectations and the adviser’s remuneration are both carefully laid out in the client contract.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
