CLAIMS against a south-west financial adviser, who directed investors’ funds into high-risk products that collapsed, are set to increase after another large mortgage fund went into administration.
Slater and Gordon commercial lawyer Jessica Latimer, who is assisting more than 20 clients in the Hamilton, Portland and Warrnambool areas recoup money lost on investments recommended by the adviser, said it was likely further claims would arise following the recent collapse of Gold Coast-based LM First Mortgage Income Fund.
“LM was one of the financial products that this particular adviser was steering clients towards and it is now highly unlikely they will be able to recoup any money from the fund, leaving them no option but to pursue the adviser through litigation,” Ms Latimer said.
Funds in LM First Mortgage Income Fund were frozen in March 2009, affecting life savings of many south-west locals, including farmers, retirees, factory workers and professionals.
“We are talking about a significant amount of money that was put into a high-risk fund despite that fund clearly being entirely inappropriate for these people who were looking for a safe place to put their money,” Ms Latimer said.
She said the number of claims against the adviser had been growing steadily since February last year, after The Standard reported that a Slater and Gordon client from Portland had successfully recouped a significant portion of the six-figure sum invested on the advice of his financial adviser.
“There will certainly be others in the same situation who are yet to come forward and my advice to them would be to seek legal advice as soon as possible as their right to pursue litigation will soon expire,” she said.
Ms Latimer said financial advisers could be pursued under the Corporations Act and through the civil courts if they were negligent in their client dealings.