Claim for damages against investment advisor/investment intermediary arising from an advisory contract

We are currently in a historic low in interest rates. At the same time, however, it is noticeable that the profession of investment advisor is also experiencing a real “boom”. Unfortunately, not all investment advisors provide proper advice, as their focus is primarily on selling products. Furthermore, some advisors are not aware of the scope of their duty to advise and inform.

Conversely, for the consumer this means that when receiving advice from an investment advisor/investment intermediary, the consumer should make sure of the advisor’s competence, seriousness and expertise before and/or during the consultation.

Every consumer should pay attention to the following points during a conversation with an avoidant investment advisor in order to avoid unwanted surprises and at the same time find the investment product that is right for him or her:

Do you understand the financial investment/capital investment being offered to you?

  • Was the investment advisor able to explain to you in detail how the avoidable investment works?
  • Did the investment advisor personally examine the product for profitability and plausibility?
  • Is the investment advisor willing to enter into a formal advisory agreement with you as well as conduct a personal risk analysis to determine which investment is suitable for you personally?
  • Have you been informed about a possible total loss risk in order to be able to assess whether you are financially able to cope with this risk?
  • Did the investment advisor discuss your investment goals with you or does he only want to sell his own products?
  • Is the investment advisor prepared to provide you with the documents relating to the investment, including the documents on the basis of which he has carried out a profitability analysis and plausibility analysis, so that you can have them cross-checked by a third party, e.g. a tax advisor or lawyer, before you make a decision?
  • Do you feel pressured to complete the investment?
  • What costs are involved in the investment, e.g. commission payments, fees for the asset manager (e.g. fund administrator), taxes, etc.?

If an investment has already been made and you fear that you have not been fully informed by your investment advisor or that he has negligently concealed risks from you or even knowingly withheld them, we advise you to contact a lawyer to have it checked whether you have a claim for damages against your investment advisor (BGH, NJW 19 82, 10 95, NJW 19 79, 1449; NJW-RR 2007, 16 92, RN. 8 M W N; BGH XI ZR 320/06; ruling of 25.09.2007).

Whether you can assert a claim for damages against your financial advisor is, however, always a case-by-case decision, so it is essential to consult a lawyer (BGH, WM 1993, 1455 (1456)).

However, you should act immediately as soon as you notice that the investment is developing contrary to the promises made by your investment advisor. However, this does not automatically mean that your investment advisor gave you bad advice or even withheld information from you that would have been relevant in the original investment decision.

In addition, the statute of limitations must also be kept in mind. In cases based on misadvice, the statute of limitations usually expires after 3 years from knowledge of a breach of contract/misadvice. A statute of limitations is difficult to calculate for the consumer himself, so you should react quickly as soon as you fear that you have been given incorrect or false advice by an investment advisor.

In practice, we often notice that “common sense” stops with some capital investments. In this case, we can usually only advise: Trust your gut feeling! An investment product that sounds too good to be true – for example, in that you can generate a very high promised profit by investing only a small amount of capital – should usually be treated with caution.


Common sense should also be applied to capital investments, alarm bells should ring when big promises are made, and finally, you should only invest in a product that you understand 100%. With every form of investment there remains a certain risk, but this risk must be understood by the consumer and it must be calculable. If this is not present, the product is probably not suitable for the average consumer.

Author: Anthony Tur