The High Court in Wellington found Church and Moneyworks had breached their duty of care by recommending investor Neil Armitage have too large an exposure to finance companies.

Armitage had completed a risk profile which found him to have a 'conservative' risk profile and the Court ruled Church had failed to provide competent advice after an "imprudent concentration" of funds in four finance companies.

Church was also found to be negligent in recommending the ING credit opportunities fund (COF) as a fixed interest component of the investment after Justice Dobson found the COF was not a fixed interest investment, despite documentation to suggest it was.

Church's advisers said they would appeal the ruling on the grounds that her advice met industry standards at that time and that she was entitled to rely on material provided by ING about the fund.

The case is being seen as a test ahead of new financial adviser regulations, and Institute of Financial Advisers (IFA) president Nigel Tate said that while the case was not a cause for worry among advisers, it would be studied seriously.

"I don't know that its a cause for concern. I think it's a good indicator as to what the courts will look at going forward."

He said he had spoken to Church and she considered her actions had been appropriate for the time, and that the Judge had based his determination on a hindsight view that the COF was a riskier investment than first thought.

"I think the Judge made a determination based on retrospective knowledge of the risks involved in the COF. The Judge has applied his current knowledge to a previous situation and said these funds created some problems and now, when I look at them, they actually look more like an equity type fund than a fixed interest fund."

Tate described Church as an capable adviser and said she believed she would win her appeal.

"She's very confident she's done the right thing and is very confident of winning the appeal."

Armitage originally sought around $450,000 in damages but was awarded $60,000 after Justice Dobson said he had also been at fault, pulling money out of some of his ING Investments before investors were paid out.

Describing the case as difficult, with both Church and Armitage apportioned some blame for the losses, Tate said the Institute would keep a watching brief on what he called a ground breaking case in New Zealand.