Executive Summary: Key Legal and Evidentiary Issues

• Central question of whether Banque Nationale advisers breached their duty of information and advice when recommending the transfer of a guaranteed lifetime annuity (SunWise Elite) to non-guaranteed bank products
• Significance of the client’s clear instructions and understanding, including express acknowledgment that she would lose the lifetime annuity and could not obtain an equivalent product after the transfer
• Assessment of the applicable standard of care for financial advisers (obligation of means, not result) under articles 2138–2139 C.c.Q. and related jurisprudence on investment losses
• Evaluation of the evidentiary record on whether the advisor was required to contact the former broker (Bruno Flauto) before proceeding with the transfer and whether this omission constituted fault
• Failure of the plaintiff to prove actual, quantifiable damages or actuarial loss arising from the loss of the SunWise Elite product, despite alleging a six-figure impact
• Absence of proof of a causal link between any alleged fault and the claimed loss, leading to dismissal of the action and an order that the plaintiff reimburse the bank’s legal costs of 364 $

Factual background

Manon Lachapelle had been an investor with Sun Life Financial since at least 2008, working through her broker, Bruno Flauto. One of her core products was a lifetime annuity known as SunWise Elite, which provided her with a guaranteed income for life. By 2021, the total value of her investments stood at around 460,000 $, of which approximately 367,000 $ was held in the SunWise Elite product. In parallel, she participated in the RREGOP pension plan as a long-time teacher, giving her a defined benefit government pension that would provide stable income in retirement.

Dissatisfied with the management fees and the overall performance of her Sun Life portfolio, she approached Banque Nationale (Investissements) in September 2021 to explore better financial products. She met with several bank representatives, including adviser Marc-Antoine Turgeon. During these meetings, she produced documents from Sun Life showing a 1.92% increase in her assets since 2008 contrasted with management fees of 3.43%. Her goal was to improve net returns and reduce costs as she neared retirement.

Investment products and advice provided

The evidence showed that Banque Nationale did not offer a lifetime annuity comparable to SunWise Elite and was not legally authorized to manage such products. Instead, the bank proposed alternative investment vehicles with lower fees but without the lifetime income guarantee. On 26 August 2021, Lachapelle signed a financial planning mandate with the bank, and on 2 September 2021, she executed a transfer authorization form, indicating a total transfer of all products held with Sun Life.

A key meeting took place on 9 September 2021, during which the bank summarized the discussion in an internal document. That record reflected a detailed explanation of the distinction between fund management costs and the guarantee embedded in the SunWise Elite annuity. The notes indicate that the client understood she was giving up the lifetime annuity in order to reduce management fees, that she considered her RREGOP pension sufficient to cover her longevity risk, and that she was told she would not be able to obtain an equivalent annuity product on the market after the transfer. She was also advised that the transaction would trigger a capital gain of about 19,000 $, generating additional income tax for 2021, and that she wanted a higher long-term return and accepted market fluctuations with no short-term liquidity needs.

Following this meeting, Sun Life transferred the funds to Banque Nationale quickly. The SunWise Elite product was consequently terminated, and the sums were invested in the bank’s proposed products.

Parties’ positions and claimed loss

Some months later, Lachapelle reconsidered her decision. Realizing that she no longer had the SunWise Elite annuity, she concluded that she had lost a product she greatly valued for its lifetime income guarantee. In December 2021 she contacted her former broker, Bruno Flauto, to have him resume management of her investments, but by then the SunWise Elite product was no longer available on the market.

Lachapelle alleged that she had suffered a loss exceeding 100,000 $ due to the loss of the annuity’s guarantees, although she was limited to a 15,000 $ claim in the Small Claims Division. She criticized the Banque Nationale adviser, in particular, for not contacting Flauto as she claimed to have requested before the transfer, and for not adequately protecting her interests in the restructuring of her portfolio.

The bank denied any fault, arguing that it had acted prudently and diligently, fully explained the consequences of the transfer (including loss of the annuity and tax impacts), and executed the client’s clear instructions to move to lower-fee products with potentially higher long-term returns.

Legal framework and standard of care

The court applied the civil liability framework, requiring proof of three elements for the plaintiff to succeed: a fault by the bank, a compensable damage, and a causal link between the fault and the damage. In the specific context of financial advisers, the judge emphasized that the obligation of the adviser is one of means, not of result. Under articles 2138 and 2139 of the Civil Code of Québec, the representative has duties of information and advice but is not required to guarantee investment performance or market outcomes.

The decision relied on established Quebec jurisprudence that confirms a financial adviser who properly informs and advises a client is not an insurer of the client’s investments and that no presumption of fault arises merely because a client suffers a financial loss. Courts have consistently held that, absent special guarantees, exposure to market risk and fluctuations in value is inherent to investing in anything other than risk-free deposits.

Court’s analysis on fault and the adviser’s conduct

On the evidence, the court found that Lachapelle’s initial intention was coherent with her financial situation: she already had a secure government pension through RREGOP and therefore could afford to relinquish a private lifetime annuity in exchange for a lower-cost, potentially more profitable portfolio. The contemporaneous notes of the 9 September meeting carried significant weight. Those notes showed that she understood the consequences of the transfer, expressly acknowledged that she was giving up the SunWise Elite annuity, was informed that a similar annuity would not be available afterward, and accepted both tax and market-risk implications.

The court rejected the portrayal of Lachapelle as a vulnerable or unsophisticated client unable to grasp what was being proposed. Instead, it held that she was the one who gave a clear mandate to the bank to restructure her investments to reduce fees and seek better returns. Her later regret, although understandable, did not convert a properly executed mandate into a fault by the institution.

As for the allegation that the bank’s representative was obliged to contact Flauto before proceeding, the court found no evidentiary basis for such a duty. The judge concluded it was up to Lachapelle herself to obtain any further information she wanted from her former broker, particularly since the bank had clearly advised her she would lose the benefit of the lifetime annuity if she proceeded with the transfer. In these circumstances, the adviser’s conduct remained within the bounds of what a normally prudent and diligent financial adviser would do in similar conditions, and no breach of the duty of information or advice was established.

Findings on damages and final outcome

The claim also failed on the issue of damages. Despite alleging a significant loss value, Lachapelle offered no actuarial or other rigorous quantification of the long-term financial benefit she might have obtained had she kept the SunWise Elite annuity. Her own witness, broker Bruno Flauto, acknowledged he was not an actuary and that it was impossible to reliably calculate the long-term advantage she would have enjoyed under the previous arrangement. Consequently, the court held that she had not proved any concrete, compensable loss flowing from the change in her investment products.

Because no fault, no proven damage, and no causal connection were established, the court dismissed the action in its entirety. In its final orders, the Court of Québec (Small Claims Division) rejected Lachapelle’s 15,000 $ damages claim and ordered her to reimburse Banque Nationale (Investissements) for its legal costs in the fixed amount of 364 $, making the bank the successful party and the sole recipient of a monetary award in this case.