Secondary

Fourth Ombud Ruling on RVA Fund

The office of the FAIS Ombud published its fourth determination against a financial advisor on Friday. In essence, it found that, in four all instances, the losses suffered by investors resulted from clients not being properly advised of the inherent risk of the scheme, and the fact that application forms were totally lacking in information which would indicate to clients who or what they were entrusting their funds to.

Principally the issues pertain to the respondent’s failure to understand the entity, (RVAF) and the risks to which he was exposing his clients when he advised them to invest therein.

Evident therein are the material deficiencies in the application forms; lacking in substance or form it is difficult to understand who or what the complainant was dealing with. Yet in spite of these failings, funds were transferred directly into RVAF without even the protection afforded by a nominee account.

The respondent “…stated that he enclosed as part of his investigations into the investment vehicle a copy of the FSB License brochure on ‘Abante Capital (managing agent)’ and presentations done by Abante Capital. Yet there is not so much as a single mention of Abante within the contractual documentation, further reinforcing the fact that the respondent himself failed to understand the contracting entity.

Quite simply, no financial service provider would have advised that this product was a suitable component of any investment portfolio had they so exercised the required due skill care and diligence.

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