Filing a Complaint Against a Financial Adviser
By: Source: AARP.org Date Posted: 2005-03-20 12:08:27
There's a chance you could lose money by following the advice of a financial planner or stockbroker. This might happen if a particular investment doesn't do as well as you thought it would. It also could happen if your adviser is incompetent or dishonest.
If you lose money because of an adviser's incompetence or dishonesty, you might consider filing a complaint against the adviser. You might not get your money back. But you could prevent that adviser from hurting other consumers.
What You Should Know
Send a Letter
If you have a complaint against a financial planner or broker, write a detailed letter explaining your problem. Send the letter, by certified mail, to your adviser's firm. It's best to address the letter to the firm's compliance officer.
If the adviser is a licensed securities representative, you can report the problem to regulators in your state. First contact your state's Attorney General's Office or its Securities Commission. These offices can advise you about the next steps to take. You can also contact these national regulators:
U.S. Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549
Office of Investor Education and Assistance
URL: http://www.sec.gov/complaint.shtml
North American Securities Administrators Association, Inc.
Suite 710
10 G Street, NE
Washington, DC 20002
(202) 737-0900
URL: http://www.nasaa.org
Financial Industry Regulatory Authority
URL: http://www.finra.org
Contact the Professional Organizations
Your stockbroker or financial planner probably belongs to a professional organization. When the adviser joined this group, he or she agreed to follow certain codes of conduct. If the adviser violates these codes, he or she could lose standing with the organization. The adviser could also lose any credentials that the group provides.
If you have a problem with a financial planner or broker you may want to contact the organization to which he or she belongs. These might include:
The American Institute of Certified Public Accountants.
Personal Financial Planning Division
1211 Avenue of the Americas
New York, NY 10036
888-999-9256
URL: http://www.aicpa.org
The Certified Financial Planning Board of Standards
1700 Broadway, Suite 700
Denver, CO 80290
888-237-6275
URL: http://www.fpsb.org
The Financial Planning Association
3810 East Florida Avenue, #708
Denver, CO 80210
800-282-PLAN
URL: http://www.fpanet.org
The National Association of Personal Financial Advisers
355 West Dundee Road, Suite 200
Buffalo Grove, IL 60089
888-FEE-ONLY
URL: http://www.napfa.org
Go to Arbitration
Through arbitration, a dispute between two or more parties is resolved by impartial persons. These impartial individuals are called arbitrators. Arbitration has often been used to resolve consumer disputes with stockbrokers because it is quick and inexpensive. An arbitration award is final and binding. When you choose arbitration, you give up your right to pursue your dispute through the courts. Few courts will agree to review an arbitration award.
You file an arbitration claim with a self-regulatory organization (SRO). Different SROs supervise different stock markets. Each organization has a list of individuals who are qualified to serve as arbitrators. Arbitrators are not employees of the SRO; however, they do receive a stipend from the SRO.
After you file a claim with an SRO, the organization sends your claim to the opposing party. This party is called the "respondent." The respondent has 20 business days to make a counterclaim in the dispute. After this counterclaim is received, the SRO schedules a hearing. During the hearing, each party has the chance to present evidence and hear from witnesses.
Anyone who brings a claim to arbitration has the right to hire an attorney or a non-attorney representative. Be careful when choosing someone to represent you:
- Make sure he or she is competent and will represent you well.
- Be sure to interview several attorneys or representatives before you hire anyone.
- Make sure the attorney or representative has the right experience for the job.
- Be clear about what you can expect from the representative or attorney, and how much you will pay for services.
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