careful consulting as a principle
Like the asset manager the investment consultant too is liable to the investor on grounds of true and careful exercise of duties conveyed to him. He is under the obligation to give professional advice.
The diligence becoming applicable is determined by the above mentioned criteria, again being set on a careful commissioner. Requirements as to his professionalism are higher if the investment consultant performs his activities as a career against a fee.
A liability will be initiated by a careless and disloyal exercise of his duties which actually harm the investor.
However, the investment consultant is not responsible for the investment`s lack of success, which the client hoped to be successful. If the investor suffers a loss due to falling prices of the investment, the investment consultant is free from any liability, provided he had advised the investor carefully and completely and suggested a reasonable or advisable investment tool. Losses due to general weakness of the market which cannot be predicted are always to be borne by the investor.
On the other hand, the investment consultant will be liable if he offers his clients financial products which are not compatible with the respective client profile.