Financial Institution Not Liable For Loss of Invested Inheritance

There have been many court decisions in recent years with the courts have found financial advisors to be negligent in the handling of the investors funds.

This was not the case in the recent decision from Ontario in Erst v. Royal Mutual Funds Inc. 2011 CarswellOnt 15933

 

The plaintiff investor had invested her inheritance with the defendant financial institution.

The investment advisor determined  the investors investment portfolio, which showed her objective was a combination of modest income and long-term growth, namely  a balanced investor.

The investor accepted the advisor’s recommendation as a twin mix of investments on fully informed basis.

The financial markets suffered a collapse and the investments declined to such an extent that the investor redeemed her investments, and crystallized  loss of $34,000

The investor brought court action for damages arising from these investment losses, and her action was dismissed

.

The court found that the financial institution was not responsible for her losses as it did not mischaracterize the investors investment profile.

 

There was no negligence or breach of contract in setting up her portfolio, nor in the time up to until hr redemption of the investments.

The court found that the institution had committed no actionable wrong in assessing the investor, advising her, and setting up her portfolio, which the Court found was all done  in accordance with her instructions

The investment advisor consistently gave the investor the correct advice, and specifically to hold on to the investments because the losses were likely to turnaround in the long run

The investor ignored this advice and was the one who made the decision to redeem her investments and crystallize her losses.

– See more at: http://www.disinherited.com/blog/financial-institution-not-liable-loss-invested-inheritance#sthash.axVd9Tta.dpuf

Trevor Todd

Trevor Todd is one of the province’s most esteemed estate litigation lawyers. He has spent more than 40 years helping the disinherited contest wills and transfers – and win. From his Kerrisdale office, which looks more like an eclectic art gallery than a lawyer’s office, Trevor empowers claimants and restores dignity to families across BC. He is a mentor to young entrepreneurs and an art buff who supports starving artists the world over. He has an eye for talent and a heart for giving back.

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