Investors need to be educated about risks

An investor perceives a fund’s prospectus as “too thick and heavy” to read. Now he is suing the bank for incorrect advice. The BGH dealt with the case.

An investment advisor must explain the main risks of an investment to a customer even if the customer does not want to read the sales prospectus.

AInvestment advisors must explain the main risks of an investment to a customer even if the customer finds the sales prospectus “too thick and too heavy” to read. This emerges from a ruling by the Karlsruhe Federal Court of Justice (BGH) published on Wednesday.

In this case, a Postbank customer who invested tens of thousands of euros in ship funds is fighting for compensation for incorrect advice. The plant had not developed to his satisfaction. (Az. III ZR 498/16)

The man had described the prospectus as “paperwork” and did not want it. According to the BGH, the refusal to accept the prospectus cannot simply be interpreted as a lack of interest in any clarification. “On the contrary, the investor can in principle expect the advisor to provide the necessary information (also) in a personal conversation,” says the judgment. Specifically, it was about whether the customer was correctly informed about the commissions incurred. The advisor has to mention this unsolicited from a certain size.

That didn’t happen here. However, it is unclear to the BGH whether the man would not have definitely opted for the system anyway. The Higher Regional Court of Celle must therefore clarify the matter more precisely – a stage win for the defendant Postbank.