Advisors in Alberta are breathing sighs of relief after a murder trial against a former advisor came to a close this week, ending months of bad publicity for planners and negative attention to the industry.
“It takes actions of one person to damage an industry. You get nut-balls everywhere but clients put an added burden of trust in their advisors,” Shafik Hirani told WP in an interview.
“That said, it’s tough in reality there are no winners here.”
The advisors comments come after Brian Malley, 57, was sentenced to serve an automatic life sentence with no chance of parole for 25 years for the murder of Victoria Shachtay, a 23-year-old single mother, on November 25, 2011.
The former financial advisor at Assante Capital Management in Red Deer built and delivered a pipe bomb that killed a young mother from Innisfil, Ontario.
Shachtay hired Malley to manage approximately $575,000 insurance settlement she’d received following an auto accident that made her a quadriplegic. The prosecution alleged that Malley killed the victim to cut ties after losing all of her settlement and contributing $44,000 of his own money.
Shortly after he was accused, 54 clients came forward and complained about Malley’s handling of their accounts, according to legal documents from Canlii.org, but the courts focused on just 12 in relation to the case.
News of the case sent chills down the spine of Hirani, who condemned Malley’s actions while assuring that advisors are there to protect, not hurt clients whether physically or financially.
“We have a fiduciary responsibility to our clients and in this case, a sociopathic criminal is giving his company and all advisors a bad name,” said Hirani. “He got what he deserved and my empathy goes to the child who has been left without their mother in this tragic case.
“We are held to a higher standard of trust.”
Malley, however, obviously didn’t take that responsibility very seriously.
According to the documents from CanLii, Malley failed to get to know his clients, many of whom were retired of approaching retirement and had very little investment knowledge.
“… He recommended that Clients hold highly concentrated positions in speculative securities such as junior issuers and commodity based leveraged ETFs,” as quoted in the documents. “In many cases, he recommended that the Clients borrow on margin or against their home equity in order to purchase securities.
“He also engaged in discretionary trading in the accounts of seven of the Clients, without first having the accounts approved and accepted as discretionary accounts.”