Financial Investment Lapsed and I Lost the Total Value – Who Was Responsible, Me or My Financial Planner?

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Sometimes when someone has hired a financial planner to invest in certain items, real estate or other holdings, the entire value if lost based on the actions of those involved. When this occurs, it is important to know who is responsible and what happened for the money to become lost through a bad investment, and if there is any way to resolve the matter.

Financial planning for the future in investment or estate planning and retirement is part of progressing into the future. However, when the value of the investment or estate plan has been reduced to zero, it is vital to understand what has occurred and how to resolve it as quickly and best possible. If the financial planner involved in these situations has caused the problem, he or she may be responsible for compensation to the client based on certain situations and stipulations. If there was a crime involved in the planning, fraud or other illegal acts, the client may have a case against him or her.

While losses in investment and estate planning are possible, it is usually when illegal actions are involved that the client is able to sue the financial planner. Insurance policies, trusts or other items that are void, expired or invalid could lead to the planner facing a civil suit. The more information the individual had about the illegal act or invalid item, the greater he or she may end up paying out to the client. Legitimate estate plans and investments could lose money, and the owner or client is usually unable to recover, but when the planning agent or professional has completed illegitimate plans and investments he or she could face legal action.

Financial Loss in Investments

Usually when a financial planner is involved in a loss of investment, he or she is fired immediately. However, if the investment was invalid, illegal or fraud, he or she may face criminal and civil charges field by the client. Even when recorded losses are standard in financial planning, estate planning and investments, a total loss of all assets through the financial planner is usually cause for concern. Engaging in unethical or corrupt business practices are grounds for prosecution and litigation. Even if the planner planned on replacing the lost income, sometimes his or her actions cannot undo the damage of illegal activity.

Insurance policies that should provide a return on investment or that have death benefits should be valid based on the information provided to the client. However, if the policy has lapsed and the owner of the estate is unaware of this, he or she may be out all the money provided for the defunct coverage. If the planner engaged in fraudulent activity through selling lapsed insurance policies and similar investment opportunities, he or she could land up in jail or prison if convicted of the act. Then, the client may file a lawsuit to recover monetary damages if possible.

Responsibility in Investment Losses

Depending on the actions taken by both investment planner and the client, it is difficult to tell which party is actually responsible for financial losses. However, illegal activity, fraud and similar crimes could lead to one or both persons in jail or prison. These matters deal more with how much knowledge each had of what was transpiring with the monetary investments. If the insurance policy, trust, estate plan or other program or plan was routed in corrupt or shady propositions, it is possible that the client was aware that the financial planner was not performing services founded in legality.

If only one of the two was responsible for ensuring that the plan was legal, the client could have no knowledge of criminal activity. However, when there are no crimes committed, the losses may be no one’s fault. Sometimes, an investment will lose money no matter what the client and planner attempt. It is crucial to determine what happened prior to the loss before attempting to seek a remedy or damages through litigation. Even the best advisors are unable to predict what the market or investment items may cause.

Legal Support in Investment Losses

When the client of a financial planner believes that his or her professional has engaged in illegal activity or is responsible for the entire loss of a portfolio or investment, it is imperative he or she hire a lawyer to assess the case. The legal representative will make a determination in how to proceed.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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