please explain your thoughts on the case below.

Case Study - The Mutual Fund

A few years after immigrating to Canada, Mr. and Mrs. Smith, a middle-aged couple opened an account with a full service investment firm and deposited $90,000 from the sale of their home in the US and the husband's severance pay.

The clients said they told their investment advisor that they planned to use this money, which represented their entire wealth, for a down payment on a house and for their daughter's upcoming wedding. At the time, the husband worked as a tradesman and the wife was employed as a lab technician, and they were living in a one-bedroom apartment with one of their children. Except for personal effects, the clients had no other assets. They also had an outstanding line of credit that was close to its $15,000 limit.

The clients indicated on the account opening documentation that their investment knowledge as "good," although their only investment experience was with GICs and a bank money market mutual fund. The clients' risk tolerance was identified as 60-per-cent medium risk and 40-per-cent high risk, and their objectives as 60-per-cent long-term capital appreciation and 40-per-cent short-term capital appreciation and speculative trading.

When the account was opened, it was invested 100% in equity mutual funds, most of which were foreign, technology, sector or theme funds. All were purchased on a deferred sales charge (DSC) basis or back end load.

The clients' money was invested as though their investment objectives were 100% long term, and nearly all of it was in medium- to high-risk investments.

Five months after opening the account, the clients wanted to withdraw $13,000 to pay for the wedding, which was scheduled to take place within a few months. Since the mutual funds had declined in value and were subject to significant DSCs, the advisor recommended they not sell any of the investments, and instead helped arrange a $13,000 margin loan. The advisor failed to review the clients' financial situation at that time. Had he done so he would have learned that they didn't have enough money to service the loan.

By the end of March 2017, the mutual funds had declined in value by $43,000 and the balance owing on the margin loan had increased to $17,500.

The clients are very upset with the advisor and are considering a complaint to the Ontario Banking Ombudsman. The advisor denied that he was ever told of the client's intentions for the money in the account.