How To File a Complaint Against Your Broker
Big losses have left investors infuriated. Not sure of whom to blame, some have pointed fingers at their financial advisors. Either citing that their advisors ignored their instructions or, more importantly; disregarded their risk tolerance. The result of this has seen arbitration cases against brokers up 110% in 2008. Filing for arbitration is not end of all means for investors, though. Pursuing a case requires painstaking proof and even winning doesnâ t mean that you will be made whole. Typically, investors will only recover 40% of their money.
What a financial advisor can or cannot do?If you are looking to fight back, hereâ s what you need to know.
Financial Advisors Can:
- Can make recommendations about specific investments.
- Can buy and sell those securities for you.
Financial Advisors Cannot:
- Cannot make unsuitable recommendations based on your risk tolerance and investment history.
- Cannot making trades without authorization unless they have discretion.
- Cannot make misrepresentation or omission about investment they are recommending.
How can you protect yourself from an unscrupulous broker?There are have been many high profile cases of late (Madoff, Stanford) that have left investors wondering how they can really protect themselves. Unfortunately, in the Madoff case there was no protection; at least with background checks. In that case, the old adage of â
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