Financial Adviser Pays Client $2,000 for Cancelled Meeting


A financial adviser has paid $2,000 compensation to a client after he failed to let her know, in a timely manner, that he had not been able to obtain insurance for her. The client complained to dispute resolution service FSCL that the adviser was negligent.

A case study published by FSCL explains the client, ‘Catarina’, was diagnosed with a rare autoimmune disease in 2020. She asked her insurance adviser to arrange life and health cover, though she understood an insurer would likely exclude autoimmune disease.

The FSCL says the adviser spent a month trying to arrange cover for Catarina, but couldn’t find an insurer willing to accept the risk, even with her condition excluded.

The adviser arranged a meeting with Catarina to let her know, cancelled the meeting, and then confirmed by email weeks later that he couldn’t help her. By which time Catarina had been diagnosed with cancer.

Catarina felt she lost the opportunity to find alternative cover due to the adviser’s delay…

Catarina complained to the FSCL that had she been told the decision sooner she could have made other inquiries to obtain the insurance she wanted – before the cancer diagnosis. Catarina said she lost the opportunity to find alternative cover due to the adviser’s delay in telling her he couldn’t get cover.

Catarina complained the adviser had been negligent in not telling her he couldn’t get her covered sooner.

The FSCL says the client and adviser agreed compensation for direct loss was not appropriate, because Catarina would need to show:

  • She could have got cover if she had the opportunity, and
  • That her claim would be accepted

Catarina was already suffering from cancer symptoms at the time the adviser was seeking insurance, so it’s likely any claim would have been excluded even if she had found cover, says FSCL.

The adviser offered Catarina $2,000 compensation on the basis he did not admit liability or fault, the maximum amount FSCL could award for stress and inconvenience. Catarina accepted the offer.

The FSCL says it’s important financial advisers communicate with clients to make sure they are fully informed at the earliest possible opportunity.