Getting a Dispute with Your Financial Advisor resolved

There’s no getting around the fact that losing money is unpleasant, and when losses begin to accumulate, it’s natural for people to look for someone or something to blame. Many investors believe that their broker or financial advisor is the primary source of their problems. Here, we’ll talk about how to deal with potential disagreements with your financial professional and how to avoid them in the first place.

The Most Important Takeaways

  • A high level of regulation governs the financial advisory industry. All investors and advisory clients have certain rights that must be upheld at all times.
  •  If you believe a violation or mismanagement has occurred, first determine whether or not you have a legal basis to assert your claim. The mere fact that you have lost money on an investment is not sufficient grounds for a claim.
  • If you believe you have been wronged by a broker or advisor, you can file a complaint with the Financial Industry Regulatory Authority (FINRA).
  • If your advisor’s name is preceded by a professional certification, you can also contact the credentialing body to let them know.

Understand Your Legal Rights

In exchange for entrusting your money to a financial professional, they owe you an obligation to perform at a certain level. This means that as an investor, you have a number of rights to protect your investment. The “Investor Bill of Rights” published by the North American Securities Administrators Association (NASAA) outlines your rights as an investor. The chances are that if any of these rights have been denied to you by your broker or advisor, you may have a valid claim.

When you make an investment, you are entitled to the following benefits:

  • To request and receive information from a firm about the work history and background of the person who will be handling your account, as well as information about the firm itself; to receive complete information about the risks, obligations, and costs of any investment before making a decision; and to receive recommendations that are consistent with your financial requirements and investment goals.
  • For the purpose of receiving a copy of all completed account forms and agreements
  • Obtaining account statements that are accurate and easy to comprehend
  • Obtaining information about restrictions or limitations on your ability to access your funds in a timely manner, as well as understanding the terms and conditions of transactions you engage in
  • The ability to discuss account issues with the branch manager or the firm’s compliance department, and to receive prompt attention and fair consideration for your concerns.
  • Receive comprehensive information on commissions, sales charges, maintenance or service charges, transaction or redemption fees, and penalties, please complete the form below.
  • Contact your state or provincial securities agency if you want to check on a securities salesperson’s employment and disciplinary history, to find out if an investment is permitted to be sold, to file a complaint, or for any of the other reasons listed above.
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Don’t make a snap decision.

It is important to note that simply losing money on an investment does not entitle you to file a lawsuit against your financial advisor for providing bad advice. It’s important to remember that there is no guarantee of a return on investment in the United States Constitution. Markets are inherently risky by their very nature. In order to make an investment, you must be willing to accept some level of risk against which no law or regulation can provide protection. You should file a complaint only if you believe you have been defrauded; simply losing money is not sufficient grounds for filing a complaint.

Many rules govern the behavior of brokers and financial advisors, which are governed by the Financial Industry Regulatory Authority (FINRA). Both misrepresentation and the suitability of investments are addressed by two important rules:

  • Misrepresentation in the context of an investment is defined as the intentional falsehood or omission of facts.
  • This is a classic example of a client who believes they have been told one thing, only to discover after the fact that what they believed to be true was not true.
  • It is considered unsuitable when a financial advisor or broker places a client’s money in a security that is not suitable for the client’s investment objectives. Consider the following scenario: a financial advisor makes substantial investments in high-risk securities on behalf of a client who is 75 years old and has a low risk tolerance.
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The Procedure for Filing a Complaint

When it comes to resolving a legitimate disagreement with your broker or financial advisor, there are a couple of options available. If your complaint is against a stockbroker, you must file a dispute with the Financial Industry Regulatory Authority (FINRA).

Many financial professionals are members of a charter organization, which is a non-profit organization (you can usually tell by the abbreviations after their name). These organizations have their own standards and codes of ethics, so it’s worthwhile to file a complaint with them as well as with the other parties involved. As an example, if you have a complaint against a Certified Financial Planner, you can file a formal complaint with the Certified Financial Planner Board of Standards. If the claim is made against a Chartered Financial Analyst, you can file a complaint with the CFA Society.

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You could also try contacting the securities commission of your state or province for assistance. There is a division in each state or province that deals with complaints against brokers, financial advisors, and financial planners. If none of these options prove successful, your final option is to retain the services of an attorney.

Choosing the Most Appropriate Broker

The best way to avoid dealing with unscrupulous brokers is to do your research in advance. Always check the firm’s, broker’s, or planner’s background to see if they have had any disciplinary issues in the past. Inquire about their investment style and whether they believe their style is the best fit for you. You will gain a better understanding of the broker as a result of asking these questions. You will also have something to fall back on if you believe your money has been invested in investments that do not align with your objectives.

The Central Registration Depository, a disciplinary and employment database maintained by the Securities and Exchange Commission of the United States, has made the vast majority of this information relatively accessible. On the FINRA website, you can conduct online searches using a free tool called “BrokerCheck,” which is available to all visitors.

Finally, perhaps the most important thing an investor can do is to be truthful with himself or herself. If your broker or advisor suggests an investment that you are unsure about, express your concerns. In order to be honest and credible, an advisor must take the time to ensure that you fully understand the investment before proceeding with it.

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