Where a financial adviser negligently recommends a borrowing strategy for superannuation contributions without adequate consideration of the client's cash flow to repay non-deductible debt, the adviser is liable for the cost of borrowing but only for a reasonable period during which the client should have mitigated by repaying the debt. Losses on liquid marketable securities (such as self-funding instalment warrants) attributable to general market decline are not within the scope of the adviser's liability where the investor was not locked into the investment. The content of the duty of care owed by a financial adviser is calibrated to the sophistication and experience of the particular client.
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