Arthur Smith, who is just shy of his 70^th birthday, is one of a number of investors who have gone after their financial advisers after being sold investments in finance companies that subsequently collapsed.

But while other cases involving AFAs Carey Church and Rodney Hartles have resulted in High Court judgments to be picked over by the legal fraternity and other advisers, Smith's High Court claim against his adviser's former employer ended up settling out of court. 

Smith said he couldn't discuss the settlement due to confidentiality, but he said his initial action was in the Disputes Tribunal, where he argued the adviser had breached the Fair Trading Act by selling him a "faulty" product.

"To me it was reasonably obvious with the Fair Trading Act and Consumer Guarantees Act available to people, but no-one thought to sort of suggest that the products weren't up to scratch.  I tried all the normal banging on doors; I was determined make somebody accountable."

He ended up being awarded nearly $15,000, which he used to fund a wider case against the adviser's employer.   Although he wouldn't name the company, Good Returns understands from other sources that it was Tower Financial Advisory Services.

Smith said like many fellow finance company investors he knew very little about investments so was reliant on getting good advice.

"The advisers generally end up with you having so much trust in them because they are doing something you know nothing about.  If they tell you to jump you jump," he said.

However, he said he was surprised more finance company investors hadn't taken action against their advisers.

Some investors were put off by cost and a number of people he'd spoken to hadn't even heard of the Fair Trading Act, he said.

Smith also had strong words for the finance company directors and the regulators who presided over the collapse.

"If you look on the back of a prospectus it says it's approved by a government department; why aren't they liable?"