Advisors are held at a high standard, so any breach of trust or duty can be grounds for a lawsuit. FINRA’s BrokerCheck tells you instantly whether a person or firm is registered as required by law, to sell securities (stocks, bonds, mutual funds and more), offer investment advice or both. It also gives you a snapshot of a broker’s employment history, licensing information and regulatory actions, arbitrations and complaints.

Not all financial advisors or brokerage firms owe the same legal duties to their clients. You must consult your investment loss recovery attorney for advice if your investment broker or advisor is a registered investment adviser. Making suitable investment recommendations is the cornerstone of proper investment advice. All brokerage firms and financial advisors have a duty to recommend suitable investments that are consistent with the needs and objectives of the investor.

Suing a financial advisor may also impact the advisor’s professional reputation and future business prospects. A lawsuit can damage the advisor’s reputation and make it more difficult to attract new clients. The suggestion to consult an experienced attorney is because these issues may not be as simple as they appear. You may have the best if intentions, but hitting that “send” button on your computer may negatively impact your case. Any financial documentation you may have, correspondence with your financial advisor, and other relevant evidence that you can provide to your lawyer can only benefit your case.

Types of Financial Advisors and Their Responsibilities to Clients

It’s important to learn about their investment history and how past experiences with money have shaped their views. It will explain that investing in securities involves the risk of losing capital, that there is no such thing as a guaranteed investment, and that past performance does not guarantee future results. Perhaps they are not forthcoming about their financial situation, don’t want to review or complete paperwork, or show signs that another family member has too much influence over their finances. In addition to training employees about how to keep your clients’ information safe, your employees should be trained in best practices in all areas of client relationships. Diligently supervise all members of your business so that you know how they are handling client information and the kinds of investment recommendations they are making.

Furthermore, the less of a case the firm has, the more they will resort to such tactics. It is also common for the other side to try and avoid the real issues and merits of the case from ever being discussed openly and fairly. can i sue my financial advisor Thus, the civil process itself gets misused bureaucratically, through various administrative tricks and processes, while the actual financial mismanagement is either not dealt with at all or simply denied validity.

What is the approximate value of your cash savings and other investments?

The arbitrators listen to witnesses testify, review exhibits, and determine credibility when ruling on a case. Like jurors in a court of law, the arbitrators find the facts according to the testimony and then apply them to the law. These rules apply to securities traded on the national exchanges like the New York Stock Exchange and NASDAQ, over-the-counter (OTC) securities, and other investments.

Advisor Richard Wesselt’s Barred from FINRA for Annuity Sales

For most victims of investment fraud or financial advisor malpractice, there is a mixture of emotion as well as the practical issues that need to be addressed. This is a complex area of the law involving a highly regulated industry and the details, technicalities, industry standards are likely unfamiliar to you. If you feel that your advisor has taken advantage of your trust and confidence by moving to another firm, you have several options for pursuing legal action. While there are no clear rules regarding suing a financial advisor who moves firms, there are some important things that you should look for before filing a suit. If the advisor has a bad track record, you may be able to sue him or her for breach of contract or breach of fiduciary duty of loyalty. When an investment fails to meet expectations, an investor may consider filing a lawsuit against their financial advisor.

Meet Top Certified Financial Advisors Near You

Contacting a FINRA lawyer about your claim as early as possible is important. Your financial advisor or broker also has a duty to follow your instructions and to execute orders promptly at the best available price. Unless you have given the broker written discretionary authority over the account, the broker may trade only after receiving prior authorization from you.

Attempting to Resolve the Issue Through Alternative Dispute Resolution Methods

It is also human nature that people are reluctant to admit they are in the wrong, no more so when this affects their pocket. Last, but very definitely not least, the civil law system has some intrinsic flaws that can be exploited by the unscrupulous and/or desperate. Our goal is to deliver the most understandable and comprehensive explanations of financial topics using simple writing complemented by helpful graphics and animation videos. We follow strict ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. Record any conversations with the advisor, including dates, times, and the discussion content is also essential.

When considering suing your financial advisor by filing a claim with FINRA, it is worth remembering that FINRA’s purpose is regulatory. That is, the agency’s purpose is to ensure that regulated entities and individuals in the securities industry act in conformity with its rules and regulations. Arbitration and mediation with FINRA do not necessarily mean that the investor is at a disadvantage. FINRA’s arbitrators will hold financial advisors to the highest professional standards and not necessarily side with the investment advisor.

Those are two things that are likely to get you sued or to prompt a client to file a regulatory complaint against you. If you’re signing up a new client in a bull market, don’t let the next bear market be the first time they get this information. Make sure they’re educated and prepared for every aspect of the behavior of financial markets. It’s also helpful to provide clients with a basic level of investment education, even if your client wants to be as hands off as possible. Keep in mind that clients who have never experienced such a scenario might overestimate how well they would handle it.

This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. In addition to the above, there have even been cases of outright theft, where an advisor misappropriates funds from client accounts to use for their own personal benefit. FINRA operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute. Upon receipt of the broker or firm’s answer, FINRA will generate a list of arbitrators from which a panel will be appointed. There are, beyond that, statutory time limitations (“statutes of limitations”) available to the complained-of firm or broker for certain specific allegations.

Instead, the widow should hold a number of smaller bonds, issued by several companies. This diversification reduces her risk, even though a basket of bonds might pay the same interest as a single bond from IBM. Diversification reduces risk without reducing investment yields, so there is no excuse for failure to diversify. Consequently, failure to diversify often supports a claim against a financial advisor. Before you do so, be sure to look at the statistics showing the success rates in similar claims for investors who proceed pro se (on their own) and those who retain experienced attorneys. Many times investors blame themselves for losses in the stock market; however, it may not be their fault, and financial advisors are to blame.