Dispute Resolution Case Study

Remaining alert to who benefits more from international investment advice – the investor or the adviser – was the key to a recent professional negligence claim which concluded with a good settlement for a couple leaving the UK for Gibraltar, with the help of partner Jenny Raymond.

The couple in question, the former director of a national firm and his wife, were given negligent investment advice following their move abroad, and made a claim for breach of contract, negligence, breach of fiduciary duty and breach of statutory duty pursuant to section 138D of the Financial Services and Markets Act 2000 (FSMA), in relation to investment advice and pension advice tendered by the defendant, an independent financial adviser.

Having moved to Gibraltar, they had no intention of returning to live in the UK and had received professional advice about changing their domicile. They sought to invest a total of circa £3.3 million, which consisted of savings of £2.1 million and pension monies amounting to £1.23 million.

The defendant advised our clients to invest in an offshore bond, within which the money was invested in various deposit-based products. The financial adviser breached his duties by advising our clients to invest in an offshore bond – given they had no intention of returning to the UK, the offshore bond was inappropriate for their needs and was solely recommended to enable the defendant to earn substantial commissions.

The case successfully settled with a good settlement for our clients. This case is interesting given the international issues offshore advice presents.