Financial Advisor Not a Professional That Can Be Liable for Professional Negligence

On March 24, 2016, the First Department issued a decision in Starr v. Fuoco Group LLP, 2016 NY Slip Op. 02143, holding that a financial advisor was not a professional in the sense that it could be held liable for professional negligence, explaining:

While professionals may be subject to tort liability for failure to exercise reasonable care, irrespective of their contractual duties, a financial advisor such as Eureka is not a professional. Thus, any duty owed by the Eureka defendants to render financial advisory services to plaintiff in a competent manner must arise out of a contract. Indeed, the complaint alleges that plaintiff retained the Eureka defendants and that Eureka agreed to act as his financial advisor. However, claims based on negligent or grossly negligent performance of a contract are not cognizable.

(Internal quotations and citations omitted).