Australians who invested in the collapsed LM First Mortgage Income Fund on the basis of bad financial advice could soon lose their window of opportunity to recoup losses, Slater & Gordon has warned.
Slater & Gordon commercial litigation lawyer Mark Walter said many Australians lost their life savings after advisers recommended investing in products managed by the fund, which went into administration last week.
The law firm said the six-year time limit, which generally applied for anyone wanting to sue, was closing for advice given in 2007 during the pre-global financial crisis (GFC) boom. Investors wanting to recoup losses needed to seek legal advice immediately, it said.
"We believe there is a large number of viable claims against financial advisers who recommended this and other high-risk products that will be affected by the time limit," Walter said.
"It's important that people exercise their right to hold their advisers to account and seek legal advice before it is too late."
LM was particularly popular among advisers in communities with large populations of retirees, he said.
The same applied to a number of other funds that collapsed as the GFC took hold, including the Basis Capital funds and the Premium Income fund, according to Walter.
"The people we are talking about are typically risk averse and conservative and have relied on the professional advice of financial advisers to invest in these funds," he said.
"It is debatable whether these funds were appropriate for them, given their conservative needs."
Investors were often in the dark about how to recoup losses from advisers due to bad advice, Walter said.
Since the GFC, Slater & Gordon said it had helped a number of investors recoup costs and had also issued a number of legal proceedings against advisers on behalf of investors who invested in LM.
