Insights for participants
Advisers often build strong relationships with their clients over many years, but it is important to remember that proper record-keeping is essential. No one can predict what might happen in the future, and when issues or complaints arise, we cannot rely on assumptions or memory alone.
If there is ever a disagreement between an adviser and a client about what was said or agreed upon, FSCL has to look at all the facts and any other available evidence. In cases where there are no file notes, it is one person’s word against another’s, we are likely to give more weight to the client’s memory of events because they may remember a particular situation better than the adviser, who deals with many clients.
What happened?
In 2024, Amy made a complaint against her financial adviser, saying that he did not cancel her income protection policy even though he knew that she had become a stay-at-home parent and had been unemployed since 2011.
What was FSCL’s view?
When we spoke with the adviser, he explained that he thought Amy always planned to go back to work once her children were in school, so she did not want to cancel the policy. Amy, on the other hand, said she did not realise that income protection was still part of her policies package and would have expected the adviser to let her know she was paying for insurance she could not actually claim against.
We asked the adviser for any notes, emails, or records of phone calls that showed Amy had requested that the policy stay in place or that the adviser had explained the value of keeping the policy. Unfortunately, the adviser did not have any records to support his version of events, which made it a “he said, she said” situation—something that is really hard to resolve without proper documentation.
How was the complaint resolved?
To settle the complaint, the adviser offered to refund Amy half of the premiums she had paid since 2011, which Amy agreed to. We thought this was a fair outcome because while the adviser should have clearly explained the benefits and disadvantages of keeping the income protection policy in place while Amy wasn’t working, Amy also had opportunities over the years to notice the ongoing insurance premiums being deducted from her account.
This case would have been much easier to resolve if the adviser had kept proper records of his conversations with Amy about the policy.
