*by Dr. Johannes Fiala, Lawyer (Munich), Mediator (Univ.), MBA Financial Services (Univ.Wales), MM (Univ.), Certified Financial and Investment Advisor (A.F.A.), Lecturer for Civil and Insurance Law (BA Heidenheim, Univ. of Cooperative Education), Banker (www.fiala.de)
The Federal High Court (BGH) decided now for the first time with judgement of 18.01.07 that investment consultants have to clear up unasked over the fact that the portions of closed participation (e.g. GbR funds, kg funds) are not usually or only very limited saleable, because there is no appropriate market for it.
This refers to the question of liquidability or tradability (fungibility).
Excerpt from the judgment: The BGH clarified that the possibilities of converting an investment back into liquidity also play a decisive role in the case of investments for retirement provision: The investor can, for example, change his investment objectives, become unemployed or ill. In case of doubt, an investment advisor will therefore have to clarify the risk capacity in addition to the risk appetite: In practice, investment advisors too seldom inquire about the overall asset structure and the available protection against risks. This can preprogram liability, especially if the insurance-related expertise is lacking on the part of the advisor….
Complete judgement discussion (source: Gerlach/DIREKTER ANLEGERSCHUTZ 01/08/07): http://www.experten.de/NET/documents/Unternehmen/148866/DA0731A.pdf BGH judgement: http://www.experten.de/archiv/147099_105932.pdf
(News collection invers-gruppe.de)
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About the author
PhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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