Financial firm: Halo Financial Services Pty Ltd
Date: 28 July 2026
Decision-maker: AFCA panel comprising an ombudsman and two members with financial planning experience
1. Executive Summary
AFCA determined the complaint in favour of the complainants after finding that Halo Financial Services Pty Ltd failed to provide the ongoing advice service it had been engaged and paid for. The failures concerned two distinct aspects of the service: failing to conduct an annual review that should have included the couple’s insurance needs, and failing to monitor and rebalance Ms Z’s superannuation investments.
The insurance failure produced the significantly larger loss. AFCA found that, had a January 2021 review occurred, the firm would have identified that Mr N required approximately $882,148 of life cover, would likely have quoted $1 million of cover, and that Mr N would probably have obtained that increased cover before his medical condition began. AFCA calculated an additional insurance entitlement of $471,187.50, deducted $11,000 for additional premiums that would have been paid, then attributed 65% responsibility to the financial firm and 35% to Ms Z and Mr N. The resulting compensation was $299,121.88, plus CPI-based interest.
For Ms Z’s superannuation, AFCA found that leaving her Growth-profile portfolio in cash for approximately 18 months was inconsistent with the agreed monitoring service and that attempting to wait for market stability amounted to inappropriate market timing. AFCA awarded $13,016.19, payable into Ms Z’s superannuation account, plus CPI-based interest. The loss calculation on page 9 compares an actual end value of $55,767 with a counterfactual value of $68,783.19.
The principal compliance lesson is that an ongoing advice arrangement creates an operational obligation, not merely a right to charge ongoing fees. Controls must ensure promised reviews, investment monitoring, implementation and insurance reassessment actually occur. A client’s acceptance of advice does not necessarily transfer responsibility for deficient professional advice or a failure to implement it.
2. Citation and Context
AFCA, Determination, Case 12-24-140667, Halo Financial Services Pty Ltd, 28 July 2026.
Ms Z complained both personally and as executor of her late husband’s estate, Mr N. In 2019, the couple engaged the firm for superannuation and insurance advice and an ongoing advice service. The Statement of Advice recommended $500,000 of life insurance for Mr N and transfer of Ms Z’s superannuation to BT Super for investment consistent with her risk profile.
The determination records ongoing adviser fees of 1.1% per annum, with fees continuing until June 2022. The agreed ongoing services included strategic reviews of circumstances, risk profile, needs and objectives, portfolio review, investment monitoring and rebalancing, administration assistance and technical support. See pp 2–3, s 2.1.
This is an AFCA determination, not a court judgment. AFCA expressly states that it determines complaints by reference to what is fair in all the circumstances, having regard to legal principles, applicable codes or guidance, good industry practice and previous scheme decisions, which are not binding. AFCA also records that it cannot compel or test evidence as a court can. See pp 7–8, s 3.1.
3. Procedural Posture
The matter was referred to a panel because of the complaint’s nature. AFCA states that the parties had exchanged the relevant information and had the opportunity to address the issues raised.
Its evidentiary methodology is commercially important. AFCA gives greater weight to contemporaneous documents and, where documentary evidence is absent, determines what most likely occurred on the available material. That approach was important to its assessment of the complainants’ intention to increase cover and the timing of Mr N’s medical condition.
A key procedural limitation is that AFCA states:
“AFCA is not a court of law.” See p 8, s 3.1.
Accordingly, the determination shouldn’t be treated as binding judicial authority on general legal questions, although it is highly relevant to AFCA complaint risk and expectations of financial advice firms.
4. Facts, Issues and Outcome
Ongoing review
The SOA didn’t expressly say that a strategic review would occur annually or expressly state that insurance was part of the review. AFCA nevertheless concluded that this was the intended scope of the service.
A particularly damaging contemporaneous admission was the firm’s September 2021 email:
“We should have been in contact in January 2021 for your first review and I regret this was overlooked”. See p 2, s 2.1.
AFCA rejected COVID-19 restrictions as a sufficient explanation. A remote review remained possible, ongoing fees continued to be deducted, and clients were not told the service was suspended.
Investment monitoring
In March 2020, the firm recommended temporarily holding Ms Z’s funds in cash during COVID-related market volatility and said it was monitoring the market daily. Yet the portfolio remained 100% in cash until September 2021.
AFCA also found that it didn’t implement a September 2020 recommendation to invest 25% each quarter. It did not accept that Ms Z’s agreement to the cash strategy shifted responsibility to her.
The determination’s broader proposition was that the firm’s own conservative market view shouldn’t displace the client’s agreed risk profile.
Insurance review and causation
The original 2019 needs assessment identified $659,000 of required life cover but recommended $500,000 because of budget constraints. AFCA found that those constraints had eased by 2021 and placed significant weight on emails showing the couple were actively seeking an insurance review.
The 2021 insurance-needs analysis calculated required cover at $882,148. Because the insurer offered pricing advantages around $1 million, AFCA concluded that $1 million would probably have been recommended and accepted.
AFCA also rejected the contention that the couple sought additional insurance because Mr N was already experiencing symptoms. It relied on medical material indicating onset in late December 2021.
5. Findings and Obligation Failures
The determination does not identify statutory contraventions by Act and section.
It refers to the firm’s “best interests duty” in discussing responsibility for the cash strategy but doesn’t specify the statutory provision. Therefore, it would be unsafe to convert the findings into statutory contraventions without external legal verification.
| Obligation / issue | Conduct | AFCA finding | Source |
|---|---|---|---|
| Annual ongoing review | January 2021 review not conducted | Failure to provide agreed ongoing service | pp 2–3, s 2.1 |
| Insurance review | Insurance needs not reassessed at expected review | Review should have included insurance | pp 2–6 |
| Investment monitoring | Growth-profile funds remained 100% in cash for about 18 months | Failure to monitor and rebalance | p 3 |
| Implementation | Proposed quarterly reinvestment was not implemented | Firm remained responsible | p 3 |
| Market timing | Cash maintained pending perceived market stability | “Speculative and inappropriate” | p 7, s 2.3 |
| Statutory breach | No Act or section identified | Not specified in determination | — |
6. Key Legal and Compliance Principles
Ongoing services must be operationally delivered
Charging an ongoing fee while failing to deliver the review materially worsened the firm’s position. An advice business should have a system to identify each promised review, assign responsibility, document completion, and escalate overdue services.
Scope ambiguity can be construed against the service provider
The SOA didn’t explicitly say the review included insurance, but AFCA treated a review of the clients’ “needs” as encompassing insurance because insurance was part of the original advice. Firms should therefore specify inclusions and exclusions clearly rather than relying on narrow internal interpretations of broad service descriptions.
Client agreement does not necessarily cure deficient advice
On the investment issue, AFCA said Ms Z was entitled to rely on the professional firm. Her acceptance of the recommendation to remain in cash did not absolve the firm from its own obligations.
Causation requires a counterfactual chain
AFCA did not stop at identifying a service failure. It considered whether, on the balance of probabilities, a timely review would have led to an increased insurance recommendation, client acceptance, successful underwriting and cover before the illness arose.
The determination states:
“The breach must be a cause of the loss.”
See p 4, s 2.2.
That is important for complaint handling: both liability analysis and remediation methodology should distinguish breach from compensable loss.
7. Compensation and Remedies
| Remedy | Amount / scope | Additional requirement |
|---|---|---|
| Complainant 1 — investment loss | $13,016.19 | Pay into superannuation account; CPI-based interest from 14 September 2021 |
| Complainant 2 — insurance loss | $299,121.88 | CPI-based interest from 12 December 2023 |
| Gross additional insurance benefit | $471,187.50 | Before premium and responsibility adjustments |
| Premium deduction | $11,000 | Two years’ estimated additional premiums |
| Adjusted insurance loss | $460,187.50 | Before apportionment |
| Financial firm’s responsibility | 65% | Complainants allocated 35% |
| Payment timing | Within 28 days of notified acceptance | Applies if determination accepted |
AFCA’s apportionment is notable. Although the firm had the obligation to provide the review, AFCA considered the complainants could reasonably have contacted it earlier when the review did not occur, particularly because they were conscious of underinsurance.
8. Relevance for Licensees, Advisers and Responsible Managers
The determination points to four control weaknesses that can produce disproportionate liability.
First, review scheduling must be system-driven. An adviser diary or individual memory is inadequate where a service is contractually promised, and fees continue to be charged.
Second, insurance advice requires a review trigger framework. Changes in debt, income, business circumstances, family circumstances and client concern should prompt reconsideration of cover. Even when a client initially elects reduced cover for budget reasons, the record should specify whether and when that decision will be revisited.
Third, investment implementation and monitoring must be separable and auditable. A recommendation to stage investments should generate implementation tasks and exception reporting. A portfolio intended for a Growth risk profile remaining entirely in cash for 18 months should be capable of triggering an automated exception.
Fourth, market views should not silently override client risk settings. Temporary tactical deviations require documented rationale, defined duration, monitoring criteria and an exit mechanism.
9. Risk Management and Compliance Recommendations
| Audience | Control type | Risk indicator | Practical control |
|---|---|---|---|
| Advice management | Preventative | Review anniversary approaching | Automated 90/60/30-day review workflow |
| Compliance | Detective | Ongoing fee but no review record | Monthly exception report matching fees to service delivery |
| Advisers | Preventative | Insurance deliberately below assessed need | Record affordability rationale and mandatory reassessment date |
| Investment operations | Detective | Portfolio materially outside risk profile | Asset-allocation tolerance alerts |
| Operations | Corrective | Advice issued but not implemented | Unimplemented-advice ageing report |
| Responsible managers | Governance | Repeated missed reviews | Quarterly dashboard, root-cause analysis and remediation |
| Complaints/legal | Governance | Potential counterfactual financial loss | Standard causation and loss-assessment methodology |
10. Recommended Next Steps
For an advice licensee using this determination as a control benchmark, priority should be given to auditing active ongoing-service arrangements against actual service delivery; identifying clients whose investment holdings materially diverge from documented risk profiles; reviewing insurance files where assessed need exceeded implemented cover; testing whether tactical cash positions have documented review or expiry dates; and establishing remediation protocols for missed reviews before they crystallise into AFCA complaints.
The board or risk committee should receive exception data, not just aggregate review-completion percentages. A small cohort of long-overdue reviews or portfolios sitting entirely in cash may carry more customer and financial exposure than a high-level completion metric suggests.