How to Recover Your Losses
Why sue? If your professional financial advisor has failed to deliver his/her Process Guarantee and if you have suffered a loss, then you have a way to recover some or all of your loss. A lawsuit is not personal. Many of our clients who we have helped, unfortunately, have had to sue professional financial advisors who were nice people, stalwart members of their community, people we liked.
The bottom line is that professional financial advisors are generously compensated to follow a planning process. When you review the sales materials that were sent to you, you likely recognize the many promises of excellence that your professional financial advisor used when seeking your patronage and selling you investment products (that paid his/her fees and commissions).
Few professional advisors give price guarantees. Few financial advisors are so foolish to promise an unequivocal profit of x percent or y dollars. If such a promise is made and does not occur, then you have a clear cause of action. .
But almost every financial advisor gives a “Process Guarantee”. Almost every professional financial advisor promises to:
- Know you as a client including:
- Your needs, plans, fears, assets, liabilities
- Your true risk tolerance (looking at both good times and bad times)
- The extent of your planning for the ups and downs in your life, business, family etc. - if you haven’t planned for sufficient/reasonable negative events, then this is a red-flag that cries out for your professional financial advisor’s expertise and assistance.
- Review holdings, purchases and sales suitable to you
- Recommend holding, purchases and sales suitable to you now and at all times while you are a client
- Implement your instructions and refuse instructions that are unsuitable to you
- Review your holdings and opportunities for you regularly while you are a client
First we look for the Paper Trail
Because of the Process Guarantee, your professional financial advisor can reasonably be expected to have created a significant, detailed and personalized paper trail. Despite this reasonable expectation, it is surprising how often the paper trail is starkly lacking.
If there is a paper trail, then the strength of your potential claim is best determined with a simple and thorough review of that paper trail. We review your documents, notes and records. Then we obtain the complete documents, notes and records of your professional financial advisor, his/her dealer or insurer and any other business that may records relevant to your professional financial advisor’s advice. Only after reviewing this paper trail can we provide you a meaningful opinion.
On the other hand, if the professional financial advisor failed to create and maintain a significant, detailed and personalized paper trail, then ultimately it is the advisor’s word against yours…except you have reasons to recall the details of your dealings and most professional financial advisors have so many clients that your details are lost in the masses. Who would you believe? In the absence of a paper trail, the client has a significant legal advantage.
No Paper - Then Who to Believe
Claims for compensation for financial recovery settle, or are successful at trial, based upon the reasonableness of the the client’s story as considered against the backdrop of the ability of the professional financial advisor to provide a credible and supported alternative story.
Your story must be considered holistically.
Your story must be considered in light of the your financial advisor’s and/or dealer’s own, internal records. We will get these records and review them before we provide you with our opinion. We want to advise you based on as full as review as reasonably possible; your case - warts and all.
We gather evidence regarding the plaintiff’s investment history, investment trend post-loss, and the Know Your Client factors listed above.
From the get-go we challenge our clients as potential plaintiffs. We are not in favour of taking on cases where the client’s stories don’t seem to add up. It costs a lot to commence and prosecute a lawsuit. If we don’t think the client’s case for financial loss recovery is a strong one with a sufficiently large loss to justify the investment of legal costs, then who needs the stress of a lawsuit? Our goal is to return money to your pocket. If we don’t believe that we have a good or very good chance to put money back in your pocket, then we prefer to bluntly tell you not to hire us.
If we think that your story adds up and that it makes economic sense to pursue, then the absence of a satisfactory paper trail that supports a defence by the professional financial advisor is a great advantage to us and our client. The professional financial advisor has to show that his/her advice was suitable and reasonable based upon her/his performance of their Process Guarantee duties. A paper trail is a key to a successful defence. No adequate paper trail, and the defendant professional financial advisor is sorely exposed to compensating you for your financial loss.