Imagine the following: You have trusted your hard earned money with a financial planner, only to realize that he has been playing fast & loose with your investment. Like finding out that your child’s nanny has been watching horror movies the entire night. What do you say? Here’s what you can do if your advisor is acting erratically.
First, you need to gather evidence. You need to have documentation for every interaction and transaction. Think of emails, statements and contracts – anything that will help you paint a clearer picture. This is critical because you can’t just show up at a regulator’s office with your arms outstretched and expect anything to happen.
Next, speak to the advisor. It could be a simple misunderstanding, or an honest error. If you have a simple discussion, it may be possible to resolve the issue faster than if you said “compounding interest.” When they begin to dodge your questions or try and give you the finger, it is time to escalate.
If talking to them does not help, then you should make a complaint. There is a compliance division in every advisory company that deals with these issues. You should contact them and give a concise but thorough explanation of your case. Focus on the facts, not your emotions.
Still no resolutions? Bring in the big boys: regulatory agencies like FINRA and SEC. These organizations provide online forms for you to submit complaints about unethical behavior or misconduct.
FINRA addresses issues pertaining brokers and firms, while SEC focuses on investment advisors. Do not worry if this is your first time and you don’t know which website applies. They both offer detailed information about who to contact for what.
We’ll now discuss mediation and arbitration before moving forward with legal action. Arbitration can be compared to a courtroom, but less formal. It also is faster and more binding. Mediation is when a neutral third person helps both sides to come to a mutually acceptable agreement.
In the event that things become really tough, you could also hire an attorney who is a specialist in securities law. Legal advice, while expensive, is sometimes necessary when the stakes in a case are high.
Don’t forget state regulators either! Each state oversees all advisors in its borders through its securities division. The state securities divisions can act as an additional avenue to make a complaint when federal channels are blocked.
Social media has also been known to be effective in drawing attention.
You must be patient. The process will not end overnight unless the parties involved are suddenly hyper-efficient. Stay calm but persistent; frustration will only cloud judgement further along this winding journey toward justice (or, at least, resolution).
To summarize: document everything meticulously starting the day you start; communicate first directly, then escalate using proper channels in a methodical manner; consider alternative conflict resolutions before deciding to go head-first into legal fights; use federal and state resources carefully while keeping social networking as a weapon of last resort
Here’s your guide, a practical guide sprinkled liberally with seasoned wisdom gathered over years of experience navigating murky water filled with financial misadventures.