Financial Adviser Negligence Claims | Specialist Solicitors | Carruthers Law

Financial Adviser Negligence

Financial adviser negligence occurs when a financial adviser fails to provide advice and services to the standard of a reasonably competent professional, resulting in a financial loss to the client. In the UK, financial advisers owe their clients a duty of care to act with reasonable skill, care, and integrity. If an adviser’s conduct falls below this standard and you suffer loss as a result, you may have grounds to bring a professional negligence claim. Clients place tremendous trust in their financial advisers, so negligent advice can be particularly costly and damaging to personal or business finances.

At Carruthers Law, our expert solicitors (based in Liverpool and serving clients nationwide) are here to help if you believe your financial adviser has been negligent. We will clearly explain your rights, evaluate your case, and guide you through the process of making a claim. Contact our financial negligence team today for specialist advice on the best and quickest way to secure compensation for your losses.

What Is Financial adviser Negligence?

Financial adviser negligence is a form of professional negligence. It means the adviser did not perform their role to the required standard of care, and as a result you suffered loss. Financial advisers (whether independent advisers, wealth managers, insurance brokers, or bankers) must be authorised by the Financial Conduct Authority (FCA) and follow strict regulatory rules. These rules exist to protect clients, and advisers are expected to act in your best interests. In most cases professionals do their job properly, but if advice is given that no competent adviser would have provided, or crucial steps are overlooked, the adviser may be in breach of their duty of care to you.

Negligent financial advice can arise in many situations. It is important to distinguish between unlucky outcomes (e.g. market downturns) and true negligence. An investment can lose value due to market forces alone – that doesn’t automatically mean the adviser was negligent. However, if your adviser failed to meet the standards of their profession and this caused your loss, then you have experienced financial adviser negligence. In essence, you entrusted a qualified expert to advise you, and they let you down by giving advice or service that fell below what is reasonably expected of a competent adviser. This can entitle you to claim compensation for the harm suffered.

Examples of Financial adviser Negligence

Financial adviser negligence can take many forms. Some practical examples of negligent advice we commonly encounter include:

Recommending unsuitable investments or products: Advising you to invest in high-risk or complex financial products that are inappropriate for your needs and risk profile. For instance, mis-selling a risky investment, pension, or mortgage that was not suitable for your personal circumstances.
Failure to explain risks: Not fully informing you of the risks, fees, or consequences of an investment or financial product. An adviser should clearly explain any potential downsides; if they gloss over important details (such as locking your money away or risk of loss), this can be negligent.
Negligent pension or mortgage advice: Mis-selling a pension transfer, equity release scheme, or mortgage that left you worse off. For example, advising you to switch pensions or release equity without explaining the long-term impact, or arranging a mortgage you cannot afford – these may be negligent acts if proper care wasn’t taken.
Ignoring your instructions or circumstances: Failing to follow specific instructions you gave (for example, to invest conservatively), or not taking account of your financial situation and objectives. An adviser should assess your attitude to risk, financial capacity, and goals; overlooking these factors can lead to unsuitable advice.
Conflicts of interest or bias: Recommending a product that financially benefits the adviser (such as a commission-paying investment) without disclosing conflicts of interest. Acting for you in a situation where their interests conflicted with yours can be negligent if it results in bad advice.
Incorrect financial planning or tax advice: Making errors in calculations or giving the wrong advice on tax or investments. Examples include accounting mistakes, incorrect tax planning that leads to unexpected tax bills, or advising you to join an aggressive tax avoidance scheme without proper warning. If you were guided into an unlawful or inappropriate scheme and then faced penalties (such as an HMRC Accelerated Payment Notice) because of that advice, the adviser may have been negligent.

These are just a few examples. In general, any situation where your adviser’s poor advice or oversight caused you a financial loss (or lost opportunity) could potentially be negligent. If you’re unsure whether your experience qualifies, it’s worth discussing your case with a specialist solicitor. Carruthers Law will review the facts and advise if your adviser’s actions amount to negligence. Call us for a free initial consultation to explore your options.

Legal Basis for a Claim

To succeed in a financial adviser negligence claim, you must establish the legal elements of negligence: duty, breach, causation, and loss. In the context of financial advice:

Duty of Care: It must be shown that the adviser owed you a duty of care. This is usually straightforward – professionals automatically owe duties to their clients. A financial adviser-client relationship creates a clear duty to exercise reasonable skill and care in giving advice. advisers are expected to follow both common law duties and relevant industry rules (for example, the FCA’s conduct of business standards).
Breach of Duty: Next, you must prove the adviser breached that duty by acting (or failing to act) in a way that fell below the standard of a reasonably competent adviser. The question is: would a competent financial adviser, acting carefully, have given the same advice or made the same mistake? If not, then the duty of care was breached. Evidence of breach can include deviations from standard practise, violations of regulatory codes or guidelines, or obvious errors in judgement. For instance, an adviser who failed to diversify your investments or who recommended an unsuitable high-risk product likely breached their duty. We will often examine the relevant code of practise or FCA rules to see if they were broken, as this can support a negligence claim.
Causation: It must be shown that the adviser’s breach of duty caused your loss. This means proving a direct link between the negligent advice and the financial harm you suffered. Often this involves demonstrating that, had you received proper advice, you would not have suffered the losses. For example, if an adviser misled you about an investment’s risk and you lost money, you need to show that the losses were a result of that bad advice (and not just market fluctuations). If the loss would have occurred even with competent advice, the claim may fail on causation.
Loss: Finally, you must have suffered a quantifiable loss as a result. This is usually financial loss – such as money lost on an investment, unnecessary tax paid, penalties incurred, or a “loss of chance” to make a profit. It’s important to note that a financial loss alone isn’t enough – it must stem from the adviser’s breach of duty. However, losses can include not only the money you outright lost, but also the loss of potential gains (for instance, if negligence caused you to miss out on a better investment, this lost opportunity is compensable as a “loss of chance” in many cases ).

In summary, the legal basis of your claim is that your adviser owed you competent advice, they failed to meet that standard, and because of that you suffered financially. Our role at Carruthers Law is to gather the evidence needed to prove these elements. We will obtain relevant documents (investment statements, emails, product brochures, etc.), assess what the adviser did or didn’t do, and consult expert evidence if necessary to establish how the advice fell short. We understand that these situations can be complex, but we will break down the legal tests for you and give clear advice on the strength of your claim. Read our Guide to Bringing a Professional Negligence Claim

How to Bring a Claim Against a Financial adviser

Bringing a negligence claim against a financial adviser involves several steps. Carruthers Law will support you through each stage, making the process as straightforward as possible. Here is an overview of how the claims process typically works:

Initial Consultation and Case Review: We begin with an in-depth discussion to understand what happened and review any paperwork. This helps us identify whether the adviser may have been negligent and how strong your case is. We’ll also explain your options, such as whether to pursue a complaint through the Financial Ombudsman Service (FOS) or to proceed directly with a legal claim. The FOS can resolve complaints against financial advisers and award compensation up to certain limits in a quicker, less formal way. If your matter is relatively straightforward and within the FOS’s remit, we may advise using this free service first. However, for larger or more complex claims, or if you’re not satisfied with any FOS outcome, a formal legal claim may be necessary.
Pre-Action Protocol – Letter of Claim: If we determine you have a viable negligence claim, the next step is usually to follow the Pre-Action Protocol for Professional Negligence. This is a set of procedures that encourages early exchange of information and possible settlement without court proceedings. We will prepare a detailed Letter of Claim to the financial adviser (or their firm/insurer) outlining your allegations of negligence, the facts of your case, and the losses you are claiming. This letter effectively notifies the adviser of your claim and invites them to respond. Sometimes, we might send a brief preliminary notice first, especially to prompt the adviser to inform their professional indemnity insurers. In the Letter of Claim, we will request that the adviser or firm acknowledges receipt and then provides a full response.
Adviser’s Response: After receiving our claim letter, the financial adviser (or more typically their insurance company or solicitors) should send a Letter of Acknowledgment within 21 days, and then a full Letter of Response within three months. In their response, they may admit liability (wholly or partly), or deny the claim and rebut our allegations. They might also make a settlement offer. During this period, we stay in contact with the other side and keep you informed. If liability is admitted or a fair settlement offer is made early on, we can often resolve the claim at this stage without needing court action.
Settlement Discussions: We are proactive in seeking a positive resolution for you. If the adviser’s response is reasonable, negotiations may follow. Many professional negligence claims are settled through correspondence or mediation once the facts are on the table. Our solicitors are skilled negotiators – we will fight to secure the maximum compensation possible to fully compensate your losses. Settlement can save time, expense, and stress compared to a trial, and it gives you certainty. We will advise you on any offers and whether they represent a fair outcome. Ultimately, any settlement decision is yours to make, but we will ensure you have the guidance needed to make an informed choice.
Issuing Court Proceedings: If the adviser denies liability or no acceptable settlement is reached, we can proceed to issue a claim in the courts. This involves preparing formal legal documents (Particulars of Claim, etc.) to start a lawsuit. Rest assured, going to court is usually a last resort – the majority of negligence cases settle before trial. Even after proceedings start, settlement can occur at any time. However, if a fair resolution cannot be achieved through negotiation, we are fully prepared to litigate on your behalf. We will present your case robustly, supported by evidence and expert testimony as needed, to demonstrate the adviser’s negligence. Our experienced litigators will guide you through each stage of litigation, from filing the claim to any court hearings. While court cases can take 12-18 months or more to conclude if they go all the way to trial, remember that this is uncommon in these claims – our goal is to resolve your claim efficiently while ensuring you receive justice.

Throughout this process, Carruthers Law will handle the legal complexities and procedural requirements. We will correspond with the defendant adviser or their insurers on your behalf and keep you updated. You can be confident that every stage will be clearly explained – we know that legal proceedings can be daunting, so we make sure you understand what is happening and what the next steps are. Our team’s priority is to make the experience as straightforward and stress-free as possible for you, whilst tenaciously advancing your case.Read our Overview of a Typical Litigation Claim (England and Wales, 2025)

Time Limits for Financial Negligence Claims

It is crucial to be aware of the time limits (limitation periods) that apply to negligence claims. In the UK, you generally have six years from the date of the negligent act or advice to bring a claim against a financial adviser. For example, if your adviser gave you bad investment advice in 2019, you would typically have until 2025 to start court proceedings. If you miss this deadline, you could lose your right to claim, so acting in a timely manner is very important.

However, there are exceptions. Often clients do not realise immediately that advice was negligent. You might only discover the problem later – for instance, when an investment fails years down the line or when a hidden issue comes to light. In such cases, the law provides a secondary limitation period: you have three years from the date of knowledge of the negligence to bring a claim. The “date of knowledge” is when you first knew (or could reasonably have known) that the advice was negligent and caused you loss. This rule can extend the time limit if the six-year period has already passed by the time you discover the negligence.

There is also an ultimate 15-year long-stop deadline in professional negligence cases. This means that regardless of date of knowledge, no claim can be brought more than 15 years after the original negligent act (unless the adviser deliberately concealed their negligence or committed fraud). This long-stop can be complex to apply, and there are some nuances, so it’s best to get legal advice on how the limitation rules apply to your specific circumstances.

The key point is not to delay. If you suspect you have a claim, contact us as soon as possible. Even if you think you might be outside the time limit, speak with us – sometimes there are ways to argue a later start date for the limitation period. Our solicitors will quickly assess the timeline and ensure your claim is filed within the applicable deadlines. We will take prompt action to protect your position. By coming to us early, we have the best chance to gather evidence and build a strong case before any time bars expire. Read our guide to Limitation Periods.

Compensation for Negligent Financial Advice

One of the first questions clients ask is, “What compensation can I get?” The law aims to put you, as far as money can, back in the position you would have been in if the negligence had not occurred. In practical terms, this means you can claim for the financial losses directly caused by the adviser’s negligence, and sometimes for the loss of potential gains (the “loss of chance”).

Types of compensation (damages) in financial adviser negligence cases may include:

Direct financial loss: Money that you lost due to the bad advice. For example, the amount by which your investment dropped in value, or a sum of money that went into an unsuitable product and cannot be fully recovered. If an adviser’s error caused you to incur a tax bill or penalty, those amounts would be part of your loss. Essentially, we calculate the difference between where your finances actually are and where they should have been if you had received proper advice.
Loss of opportunity: In some cases, you can claim for profits or benefits you would have obtained but for the negligent advice. This “loss of chance” compensation recognizes opportunities missed because of the adviser’s actions. For instance, if you were wrongly advised to put your money in Investment A (which lost value) instead of Investment B (which would have yielded gains), we may claim the difference as a lost chance. The court will assess the probability of what could have happened and award damages accordingly (e.g. a percentage of the lost opportunity’s value, if applicable).
Interest: You are typically entitled to interest on your losses from the date of loss to the date of compensation, under statutory interest rates. This is to account for being out-of-pocket for that period.
Other costs and consequential losses: Any additional expenses or losses caused by the negligence can be claimed. For example, if you had to pay accountant fees to sort out a mess caused by the adviser, or you experienced an opportunity cost by having your money tied up, these may be recoverable. We will evaluate all dimensions of your loss to ensure no element is overlooked.

Importantly, any compensation is usually paid by the adviser’s professional indemnity insurance, not out of their personal pocket. Financial advisers (and indeed all professionals) are required to carry insurance for this very reason. This means that if your claim succeeds, you should be able to recover your losses from the insurer, giving you a meaningful remedy even if the individual adviser or firm could not afford to pay. In fact, as long as liability is established, the insurer generally covers the compensation and may also cover most of your legal costs. Knowing there is insurance in place can give you confidence that pursuing a claim is worthwhile and that you can actually recover the money you’ve lost.

At Carruthers Law, we will also discuss the funding options for your claim. We understand clients may worry about legal costs – our goal is to provide access to justice in an affordable way. We can often act on a “no win, no fee” basis (a Conditional Fee Agreement) in professional negligence cases. This means you do not have to pay our fees upfront, and if the case is not successful, you won’t have to pay most fees at all. Alternatively, we’ll check if you have any legal expenses insurance (for example, as part of a home or insurance policy) that could cover our fees. All of these options will be explained at the outset, so you can proceed with confidence that you won’t be out of pocket by making a claim. And as noted, if we win your case, we will seek to recover our costs from the defendant’s insurer so that your compensation is maximised.

Our Expertise and How We Can Help

Carruthers Law is a specialist in professional negligence claims – including claims against financial advisers. We have extensive experience helping individuals and businesses who have been misled or let down by professional advisers. Our solicitors understand how devastating financial negligence can be, and we are committed to achieving justice and fair compensation for our clients.

Why choose Carruthers Law? Here are a few reasons:

Proven Expertise: Our team has a strong track record of successful claims against financial advisers, accountants, solicitors, and other professionals. We know the tactics insurers and defendants use, and we know how to counter them effectively. With our depth of knowledge, you can trust that your case is in capable hands.
Industry Insight: Our lawyers stay up to date with financial services regulations and standards. We can swiftly identify where an adviser went wrong by comparing their actions against the expected standards and regulatory requirements. Whether it’s mis-selling of investments, pension misadvice, or complex tax schemes, we have likely handled similar cases. This insight helps us build a compelling case on your behalf.
Thorough Investigation: We leave no stone unturned when handling a negligence claim. Our approach is detail-oriented – we will review whether the product recommended was suitable for you, whether a proper range of options was considered, if your attitude to risk and personal circumstances were correctly evaluated, and what a careful adviser should have done in your situation. By methodically examining these factors, we can pinpoint how the advice failed you. This thorough preparation often leads the opponent to concede or settle once they see the strength of our arguments.
Client-Focused Service: At Carruthers Law, you are never just a case number. As a boutique firm, we pride ourselves on offering a personal, attentive service. Your solicitor will be accessible and responsive, keeping you informed at every stage. We understand that dealing with legal matters can be stressful – especially when they involve your finances. Our team is known for being friendly and approachable, while maintaining utmost professionalism. We take the time to explain the process in plain English, so you always know what to expect.
No Win, No Fee – Peace of Mind: We believe everyone deserves top-quality legal representation, regardless of financial means. Our no win, no fee arrangements mean you can pursue your claim without worrying about upfront costs or financial risk. We are confident in our ability to succeed, and we only get paid if we recover compensation for you. This arrangement aligns our interests with yours – we are motivated to achieve the best possible outcome for you, efficiently and effectively. (Terms of such arrangements will be explained in detail during our consultation, and of course you can ask us any questions about costs at any time.)

Ultimately, our mission is to remove the burden from your shoulders and handle the difficult conversations and legal hurdles so you can focus on moving forward. We combine legal prowess with compassion and understanding. Many clients come to us feeling betrayed by someone they trusted with their money; we take that seriously and work tirelessly to put things right.

Contact Us for Help and Advice

If you suspect that you received negligent financial advice, don’t hesitate to reach out to Carruthers Law. Our solicitors will assess your case and advise you on your next steps. Time is often of the essence, so obtaining prompt legal advice can be crucial.

Call us on 0151 541 2040 or 0203 846 2862 to speak directly with our team. We will gladly provide an initial assessment of your claim over the phone.
Alternatively, complete our simple online enquiry form on our website, and we will get back to you promptly to arrange a consultation.

We offer a free initial consultation with no obligation, so you can get clarity on your options. Should you choose to proceed, we will take swift action to protect your interests and pursue the compensation you deserve.

Let Carruthers Law help you right the wrong caused by poor financial advice. With our experience and commitment on your side, you can confidently navigate the claims process and work towards a positive resolution. Contact us now – we are ready to assist and to fight for the outcome you need. Your financial recovery starts here.