The FPA will be reviewing a decision made by the Financial Ombudsman Service (FOS) which found that a planner had breached his duty of care regarding advice made on the failed Basis Capital Yield Fund.
"The FPA will review this particular case closely because it appears that FOS is of the view that the use of risk profiling and research in this situation was inappropriate in terms of the law," FPA chief executive Jo-Anne Bloch said in a statement to InvestorDaily.
FOS questioned the adequacy of the planner's research, finding that the planner "relied a great deal on research reports" and did not make "sufficient enquiries into the true nature of the Basis Yield Fund".
FOS found the planner had breached his duty of care and obligations under the Corporations Act 2001, directing him to pay $103,382 to his client together with interest of 5 per cent per annum compounded from 15 November 2007 to the date of payment.
FPA will be working with FOS to review the case further.
"We need to understand the implications of this ruling and ensure members are made aware of them. We will be discussing this further with FOS," Bloch said.
