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Cat fight

Barbie owned a number of hospitality businesses. She was introduced to an insurance broker who helped Barbie with getting insurance cover for her vehicles and businesses.

The broker assessed Barbie’s business needs and placed her with a range of different insurance products. Barbie seemed satisfied with the broker’s advice and everything appeared to go well for a couple of years.

One day, Barbie discovered that the broker had hired one of Barbie’s staff behind her back. The broker and Barbie got into a bitter argument and Barbie decided to end her business relationship with the broker.

Barbie approached a new insurance broker who placed insurance cover for Barbie at a substantially cheaper price. Barbie felt upset that the broker had not sourced the cheapest cover for her, or prioritised her interests as a client.  

Barbie complained to FSCL about the broker’s professionalism and lack of duty of care. She also claimed the broker had not helped her with a motor vehicle claim, and did not get her the cheapest cover, so the broker could earn a higher commission.



We explained to Barbie that, as we are not a regulator, we cannot take disciplinary action or make findings of misconduct.

Barbie accepted this, and we narrowed our investigation to whether the broker had exercised the care, diligence, and skill, of a financial adviser. We checked to see whether there were any obvious deficiencies in the broker’s advice, and whether or not the broker should have assisted Barbie with her vehicle claim.



Upon review, we found that the broker had provided Barbie with adequate financial advice. The broker had approached a number of insurers to find the most suitable products for Barbie. However, the broker did not have access to the same insurance products that Barbie’s new broker had.

We explained to Barbie that an insurance broker does not have to find their client the cheapest product on the market. It is usual for a broker to approach insurers that they have a relationship with, and source products that they have an understanding of.

We found that the broker could have provided Barbie with a little more support for her vehicle claim. However, as the business relationship had deteriorated and ended by that point, we did not think that the broker needed to compensate Barbie for any lack in service.



We recommended to Barbie that she withdraw her complaint.

Barbie thanked us for looking into her complaint and asked us whether the broker would consider paying her a nominal amount to compensate her for her dissatisfaction. The broker agreed to pay Barbie a portion of her commission, which Barbie happily accepted in resolution of her complaint.


Insights for consumers

A financial adviser will generally place a client with products that they are familiar with and that is suitable for their client’s needs. They do not have an obligation to find a client the cheapest product on the market.

Dispute resolution schemes cannot punish or discipline financial advisers. The purpose of a dispute resolution scheme, like FSCL, is to provide an alternative to the court process to assist clients who have suffered financial loss.