Adviser firm pays $133,000 for part of house deposit lost in growth fund

The warning follows a case of a woman who went to a financial adviser in August 2021 after her mother gave her $500,000 to buy her first home. She wanted advice about a mortgage. The adviser also arranged for a colleague to give her investment advice, which led to the client investing all of her money in a growth fund.

A month later, she signed an agreement to buy a townhouse off the plans, which was due to be finished by October last year.

In March last year the equities market and the woman’s fund balance was dropping. She became worried about having all her money in a growth fund, but the adviser reassured her there would be a “turnaround” in her investments by October. That did not happen.

By the time she cashed up her portfolio in November, she had suffered a $160,000 loss and had to borrow an extra $160,000 to buy the townhouse.