A financial advice firm will have to compensate a client more than $300,000 after failing to monitor her investments and leaving her husband underinsured. 

Halo Financial Services recommended the woman transfer her superannuation into cash temporarily during Covid and then left it there for 18 months.  

It failed to provide an annual review, so did not increase her husband’s life insurance. 

The couple had recently migrated from China when they engaged Halo in November 2019 to provide advice on super and insurance. 

The firm recommended the woman invest her super in a fund aligned with her growth risk profile, but the timing of the transfer coincided with the Covid market crash and the firm recommended holding the money in cash until the market stabilised. 

The market settled in March 2020, but her funds remained in cash until September 2021, says a three-member panel that heard the dispute after the woman complained to the Australian Financial Complaints Authority (AFCA). 

Halo argued that it had a conservative approach to investing, but the panel says a client’s funds should be invested according to their tolerance to risk. 

It says the couple engaged Halo to provide ongoing advice but the firm failed to undertake an annual review and to monitor their investments as required. 

In 2019 Halo recommended the man take out life insurance of $500,000, less than required but based on what he could afford. 

By 2021 the couple’s financial position had improved and they were willing to buy more cover. 

Halo said there had been no changes to the couple’s circumstances since 2019, and the man’s cover remained an appropriate balance of need and affordability, but the panel says if Halo had undertaken the annual review early in 2021, the man would have bought $882,148 of cover and his wife would have received $471,187.50 more on his death in 2023. 

AFCA ordered Halo to compensate her $299,121, calculated after deducting $11,000 in premiums and by 35% because the couple were partly responsible for the loss. 

Rolling her superannuation into cash was inappropriate and she would be $13,016 better off if the funds were invested. The panel ordered Halo pay this amount into a super fund. 

Read the ruling here.