A reluctance to redeem

 

Jennifer inherits a large sum of money

Jennifer asked her family friend Joseph, a financial adviser, to invest her inheritance. Jennifer sought growth in her investment. Joseph arranged investments in property funds and international equities, which underperformed in their first year. Jennifer was new to investment and nervous about losing her funds, so she asked Joseph to redeem them.

 

Joseph encouraged Jennifer to stick with the investments to see good returns over time.

For six more months, Jennifer expressed similar concerns to Joseph. While she never gave a specific, firm instruction to redeem the investments, she was never comfortable, and she was frustrated that Joseph continually advised her that she was better off keeping the investments for a longer term.

 

After the seventh month, Jennifer spoke to a lawyer, and instructed the lawyer to write to Joseph and ask that the funds be redeemed. Jennifer received her inheritance back, though it took over two months and a lot of involvement from her lawyer.

 

Jennifer’s complaint

Jennifer’s legal expenses were $3,500. Jennifer asked Joseph to pay for these expenses, and complained to FSCL when he did not. Jennifer argued that she was forced to seek legal assistance to have the funds redeemed, with Joseph being as insistent about keeping the investments as he was.

 

FSCL’s resolution

The case manager’s view was that this complaint could be settled quickly in the interests of both parties.

 

Joseph made a goodwill offer to pay $2,000 towards Jennifer’s legal expenses to acknowledge the delays she faced in redeeming her investments. Joseph maintained he was not liable for the full legal bill, as Jennifer never gave him a firm, specific instruction to redeem her investments, and he genuinely believed that maintaining her holdings for a slightly longer term was in her best interests.

 

The parties agreed to settle the complaint.