Fiduciary duty | General financial discussion | Discussion forum

It depends on the client profile. If the client says they do not want to take ANY risk that their portfolio might decrease in value, then the adviser is right to put them in GICs.
However, since one can invest in GICs without a portfolio manager, it doesn't really make sense to use one, at least in my opinion. There could, however, be some people who want someone else to do this for them in order to ensure that all their investments are insured or because they have a disability which makes it hard for them to do it all themselves.

Yes, I wondered too where the complaint was coming from.
Everyone in this industry wants your business. Many will say almost anything to get it. Most will claim you would have done SO much better if you'd chosen them to work with and that therefore you should have. But their plan almost always involves more risk. There is a lot of psychology involved.

It's a breach of fiduciary duty to manage a portfolio outside the agreed upon parameters.

Whether or not a lawsuit would be successful would depend partly on the extent of the loss suffered by not managing the portfolio within the agreed upon parameters.

It's true that the past indicates equities beat GICs, but I'd disagree it's a given going forward. In my (likely minority) view, today's people in the western world are gleefully tossing traditional capitalism on history's trash heap, plus there's increasingly-acrimonious societal divisions on all fronts, thus I have hardly any confidence the future will resemble the general growth and prosperity of the last 70-odd years. Other parts of the world are a different matter but it's way to early to tell where it's profitable to invest there. So around here GICs might be the way to go going forward, I'm not at all sure the future will be like the recent past.