AustraliaMy financial adviser gave me bad investment advice and I lost money. Can I take legal action?
Yes, you may be able to take legal action if your financial adviser breached their legal duties — such as providing advice that was not appropriate, not based on your circumstances, or not in your best interests.
What the Law Says
Financial advisers in Australia must follow strict legal duties under the Corporations Act 2001 (Cth). Breaching these duties may give you grounds to claim compensation for losses.
Financial advisers are required by law to act in your best interests and provide advice that is appropriate for your personal financial situation, objectives, and needs.
The Corporations Act 2001 (Cth) sets out core obligations, including the 'best interests duty' and the 'appropriateness obligation'. If advice fails either test, it may be legally defective.
You generally have up to 6 years from when the loss occurred (or when you reasonably discovered it) to start court proceedings — this is the limitation period under state and territory legislation applying the Uniform Limitations Acts.
Statutory TextThe provider of personal advice to a retail client must act in the best interests of the client in relation to the advice.
— Corporations Act 2001 (Cth), s. 961B — Best interests duty
Statutory TextThe provider of personal advice to a retail client must ensure that the advice is appropriate to the client.
— Corporations Act 2001 (Cth), s. 961G — Appropriateness of advice
What to Do
Gather all records: advice documents, statements, emails, and risk profiles provided by your adviser.
Complain directly to the financial services firm — they must respond within 30 days under ASIC requirements.
If unresolved, escalate to the Australian Financial Complaints Authority (AFCA); it’s free, binding on members, and handles claims up to $1 million.
If AFCA cannot resolve it or your claim exceeds its jurisdiction, consider seeking legal advice about starting court proceedings — but act before the 6-year limitation period ends.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.