A woman who lost almost $400,000 after her financial adviser told her to sell her entire portfolio over concerns about US tariffs has been given a settlement of $320,000.
The case was dealt with by Financial Services Complaints Ltd, one of the external dispute schemes that handles complaints over financial providers that cannot be resolved between the provider and customer.
It said the woman attended a retirement planning seminar in 2020, presented by a financial adviser. Afterwards, she met with the adviser, who said her risk profile was “growth” and she had net wealth of about $2.5 million.
She retired from her job and sold her house on the basis of the adviser’s advice and projections.
She said she wanted to buy a smaller house and invest $1 million, but the adviser told her to put all her money in the sharemarket. He invested $2.3m on her behalf.
In 2022, she decided the adviser’s projections were too optimistic and went back to work. She found a house to buy and took $1.1 million from the portfolio.
The market had dropped by this point.
In April 2025, after US President Donald Trump announced trade tariffs, her adviser called and told her to sell her entire portfolio, because of the resulting market volatility. The market downturn only lasted about a week.
The woman lost $396,267.81, including fees of $101,937.60.
She complained to FSCL that the fees were excessive and the money for her house purchase should have been kept in cash, because she had made it clear she wanted to buy a house from the outset.
The adviser offered $221,000 to settle the complaint, which later increased to $247,000, before he agreed to pay $320,000, after FSCL investigated.
FSCL said the advice to sell was not that of a prudent financial adviser. Poor record-keeping made it hard to get a clear picture of the conversations that had happened.
“The adviser’s fees seemed high, but they were set out in advance and they were within a range that is acceptable within the industry, albeit that they were at the higher end. However, some of the fees were for poor advice and it was understood that an unspecified portion of any settlement would be in recognition that [the client] should not have incurred those fees.”
Massey University financial services expert Claire Matthews said it seemed an unusual case. She said she would expect the Financial Markets Authority to want to look more closely at the adviser.
“Based on the limited information available, it doesn’t appear to have been good advice.”
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