The Claimant with many years of experience in corporate finance, invested RM100,000 from his EPF into two-unit trust funds with the Asset Management Company (AMC). His portfolio then dropped to RM81,292.78, and he alleged the AMC provided misleading advice on lump-sum investment and poor diversification.

He sought compensation for the capital loss and opportunity cost, claiming his EPF funds would have grown to RM125,353.26 had they not been invested.

FINANCIAL INSTITUTION (FI)’s POSITION

The AMC argued it followed all rules, with the Claimant’s “Very High” risk profile and “Growth” objective matching the funds. They presented evidence that he received timely updates and was even advised to switch to lower-risk funds,  but he refused, and that losses were due to market downturns, not negligence.

KEY ADJUDICATION FINDING

The Adjudicator found the AMC’s version more credible, and the Claimant was aware of risks. However, a breach occurred when the AMC’s representative failed to inform him of his statutory six-day cooling-off period.

ADJUDICATION AWARD

The Adjudicator did not find the AMC’s liable for the investment’s poor performance and was found in breach of duty. The Adjudicator concluded that a fair and reasonable award was a partial compensation for the loss.