Financial advisors and accountants owe similar duties to their clients as lawyers do to theirs. Over the years, Mr. Macdonald has acted in lawsuits brought against former financial advisors and accountants.
The ways that a financial advisor can breach his or her duty to a client include the following:
1. Failing to follow the “know your client” rule and, thereby, advising a client to purchase investments unsuitable for their investment knowledge and risk tolerance.
2. Recommending the purchase of financial products when the advisor is unlicensed to deal with such products.
3. Recommending the purchase of financial products where the advisor has an undisclosed personal interest in the products. Accountants may be similarly liable for providing negligent investment advice.
In addition, they may be liable for delivering accounting services which do not meet the requisite “standard of care,” examples of which include the following:
1. Failing to properly advise about the “replacement property rules” in the Income Tax Act in respect to the sale and purchase of properties.
2. Failing to make the necessary inquires in the preparation of “Future-Oriented Financial Information” to be relied upon by a company’s investors.
Recent Comments