The Financial Markets Authority has revealed it is investigating an undisclosed number of financial advisers who recommended Ross Asset Management to their clients; however, it is understood most of the recommendations for Ross came from accountants and lawyers.

A corporate lawyer, who did not want to be named, said that aggrieved investors could possibly claim negligence on the part of these other professionals but they would have some hurdles to overcome to prove it.

“First you have to have a duty of care or some relationship.  Then you have to show that whoever it was - accountant or lawyer - that they did not take the care in providing that advice that a reasonable person in their position would.” 

The lawyer said a lot would depend on how the lawyer or accountant framed their recommendation: “most would be very careful in the way they said it”.

Institute of Financial Advisers president Nigel Tate said despite these professions not being covered by the Financial Advisers Act, they still had a professional obligation to assess the credentials of those they were referring their clients to.

“You can’t say ‘all I did was refer you to them, it’s nothing to do with me’,” he said. 

He said the issue brought up a bugbear of financial advisers: other professionals offering opinions on their advice to clients.

“I was speaking yesterday to a couple of individuals about the number of times as a financial adviser will make recommendations and the client will go to a lawyer or accountant and they say ‘I wouldn’t do that’.

“It’s very frustrating from a practitioner’s perspective when someone not qualified or competent turns around and provides an opinion on your advice.  You don’t have cardiologists making recommendations on orthopaedic surgery.”

Investor group spokesman Bruce Tichbon said Ross was recommended to him by an accountant.

“It seemed to be like great news I’d picked up under the radar… it turned out to be the worst decision of my life.”