Bad Financial Advice: Claiming Against a Negligent Adviser
Financial advisers are paid to match products to people. When the recommendation was never suitable, the loss that follows is not simply bad luck — it is often recoverable.
Last reviewed: August 2026
The most common claim types
- Defined benefit and final salary pension transfers that should never have been recommended
- SIPP investments in unregulated, illiquid or overseas schemes
- High-risk products sold to cautious or retired investors
- Portfolios concentrated in a single asset, sector or provider
- Failure to explain charges, exit penalties or lock-in periods
- Advice given by a firm not authorised for the product recommended
What you need to prove
Three things: that the adviser owed you a duty, that the advice fell below the standard of a reasonably competent adviser, and that you suffered loss as a result. The suitability report and the fact-find are usually decisive — they record what the adviser knew about you and how the recommendation was justified.
Documents to gather
- The fact-find and attitude-to-risk assessment
- The suitability or recommendation report
- Key features and illustration documents for the product
- Statements showing the value at each stage
- Emails and notes of meetings, especially anything said about risk
If the firm has failed
Check whether the firm is in default with the Financial Services Compensation Scheme. FSCS claims are free to make and cover many failed advice firms up to their limits. Where your loss is significantly above the cap, it is worth taking advice before accepting the scheme payment, because the position on the balance needs care.
Time limits
The usual six-year rule applies, with a possible three-year extension from the date you had the knowledge needed to bring a claim, subject to a 15-year longstop. Ombudsman complaints have their own, shorter windows tied to the firm's final response. Both clocks can run at once, so early advice protects both routes.
How we assess it
Send us the suitability report and the statements. We will tell you free of charge whether the advice looks defensible, what the realistic recovery is, and which route — Ombudsman, FSCS or a civil claim — gives you the most for the least risk.
Common questions
What counts as negligent financial advice?
Advice that was unsuitable for your circumstances, risk appetite or objectives; failing to explain material risks; recommending unregulated or illiquid investments to a cautious investor; or failing to diversify. The test is whether a competent adviser would have given that recommendation to someone in your position.
What if the advice firm has gone out of business?
The Financial Services Compensation Scheme may cover claims against failed regulated firms, up to its limits. Where the loss exceeds the cap, or the adviser was not authorised for the product, other routes — including claims against connected parties — may be worth exploring.
I was advised to transfer a final salary pension. Do I have a claim?
Possibly. Defined benefit transfers were the subject of widespread poor advice, and the regulatory starting point was that a transfer is usually not in a client's interest. If the suitability report did not properly justify the transfer for your circumstances, that is worth investigating.
Is the Ombudsman or a court claim better?
The Financial Ombudsman is free and effective for losses within its award limit. Where the loss is substantially larger, or the wrongdoer is outside its jurisdiction, a civil claim can recover more. We will tell you which route fits before you commit to anything.
Free, no-obligation case assessment
Tell us what happened and we will tell you honestly whether your loss is realistically recoverable. If it is not, we say so — there is no charge and no obligation to proceed.
Start your free assessment