The IFA member was charged with breaches relating to making a false or misleading statement and failing to make a reasonable investigation into the suitability of the financial product recommended. Both charges were dismissed by the Disciplinary Committee in July.

The adviser sought $17,999.16 in reimbursement of costs, but late last month the committee ruled that costs would not be awarded to the adviser, stating that the common law rules of natural justice did not override the contractual relationship between the IFA and its members. This decision followed consideration of an English Court of Appeal decision, the case of Baxendale-Walker v Law Society, where award of costs was denied for a solicitor who had faced charges brought by the Law Society, which were in part dismissed.

The adviser argues she was forced to prove herself innocent at the tribunal, rather than being proven guilty and fears the latest ruling will force many advisers to plead guilty at the early stages of a complaint to avoid a lengthy and costly legal process.

IFA president Lyn McMorran says the ruling highlights that the Disciplinary Committee is "not a puppet" of the institute and that there was no bias towards finding a guilty verdict.

"If they (the committee) don't believe that there is a case there, they will dismiss it," she says.

McMorran says the precedent discussed in the UK case argued that the Law Society had a role in upholding standards and ordering costs against it discouraged them from taking such cases.

"The whole point is that we don't want to be dissuaded from doing that just because we don't think we can afford to," she says.

McMorran adds that the biggest protection the IFA provides advisers is its Practice Standards and advisers should ensure they understand and adhere to their obligations under them.

"If you do, it makes most of it all go away," she says.

Since June 2008, nine complaints have been dealt with by the disciplinary tribunal, in which only one had a not proven finding.