Imagine you have entrusted all your hard earned money to your financial advisor only to discover they are playing fast and loose. This is like discovering that your babysitter let your children watch horror flicks all night. What are your options? How to deal with a financial advisor who is rogue, check this out.
Collect your proof first. Every interaction, every advice, and transaction must be documented. Emails, statements and contracts are all good examples. You can’t expect to get anything done if you just go into an office and wave your arms.
Talk to your advisor. Often, it is a simple mistake or misunderstanding. Simple conversations can often clear the air faster than “compound interests.” You should escalate if the person is avoiding your questions and giving you a runaround.
When talking does not work, you can file a complaint at their firm. Compliance departments are available at every advisory firm. Make sure you contact the compliance department and explain your case clearly but concisely. Stay calm and stick to timelines and facts.
There is still no solution? Now it’s time for the “big guns”: regulators like FINRA and the SEC. There are online complaint forms available from these organisations where you can report misconduct and unethical conduct.
FINRA is in charge of issues relating brokers and brokerage companies, while SEC handles investment advisors or firms that are registered with the SEC. Don’t fret if you don’t know which applies. Both sites offer information on how to handle certain issues.
Let’s now talk about mediation and arbitration as alternative options before we go full-speed into legal action. Arbitration, like court is quicker but not as formal. Mediation is a process where a third-party neutral helps the two sides come to an agreement, but without any binding decisions.
When things become really tense, it might be worth hiring an attorney with a specialization in securities law. Although legal advice is expensive, it can sometimes be necessary when there are big stakes.
Don’t forget state regulators either! The state securities department oversees all advisors working within the borders of each state. These can serve as an additional avenue of complaint if the federal route is unsuccessful.
It is surprising how effective social media can be at grabbing attention. However, you should tread carefully as making public accusations may backfire in the legal world if not properly supported.
Keep in mind that patience is the key to this whole process. It won’t be resolved overnight, except if by some miraculous event everyone gets hyper-efficient. Keep calm and persistent. Anger will only make your judgement worse as the road to justice (or at minimum resolution) becomes more winding.
Consider alternative dispute settlements before launching into legal fights. Utilize both state and federal resources wisely, while keeping social media weapons as a last resort!
Here you go — a guide filled with simple steps and practical advice gathered over many years of financial mistakes.