How to file a Complaint Against a Financial Advisor

Can you sue your financial advisor?

Though you may experience feelings of helplessness or despondency if you have lost money in an investment owing to a scam or a fraud, you need to make an effort to get to the bottom of the situation in order to initiate a recovery process. Your actions will also serve to highlight the crime and bring the perpetrators to justice. This article is to help readers know how to file a complaint against a financial advisor.

Haselkorn & Thibaut, P.A., specializes in fighting for investors nationwide to recover losses. We have over 50 years of experience will help you during the whole complaint process. Contact us today for a free consultation.

If you invest in the financial markets, it is important to know about them so that you can try to avoid getting caught in one. And if you do get caught, your knowledge of the recovery process will equip you to navigate the process, which could take between 10 and 20 months, effectively.

The legal system has several provisions for helping victims of investment frauds pursue a recovery bid. In this effort, one ally you may need is a law firm well versed in financial fraud and the recovery process. They will enable you to assess the strength of your case as well as pursue the case on your behalf.

Can you sue your financial advisor?

The short answer is that investors can sue financial advisors to recovery losses in several ways. They can file in traditional court for losses for fraud or file a complaint with FINRA. An arbitration complaint with FINRA is often faster and easier than a traditional court. Most investors that file a FINRA complaint use a law firm.

Reasons For Filing A Complaint Against A Financial Advisor

Most financial advisors provide value to their clients, however, there are some “bad apples” that cause losses for their clients. Most investors file complaints in order to recover losses from a financial advisor or financial planner.

Proper disclosure and suitability are very common reasons for reasons to file a claim. Many investors don’t know that the investment that they are in is too risky until it has lost money. Unethical financial advisors will often put clients into investment products because the products pay a large commission.

What is the Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority (FINRA), a self-regulating body, plays a crucial role in the process. It makes available an arbitration process through which claims against brokers and broker-dealers can be pursued. A complaint should also be filed with the Divisions of Securities, even though they do not have the authority to recover funds on your behalf.

With the guidance of your attorney, the following are the steps that are likely to be followed in each case of recovery filed for a financial fraud or investment scam:

1. File a Statement of Claim

The logical first step is to make a case. You will need to put out the facts as you see them, leading to the point where you contend that you have wrongfully lost money on account of the actions of the party or parties named in the claim, that needs to be made good.

This Statement of Claim will be served on the party, usually a brokerage firm, that you are proceeding against.

2. Responding with a Statement of Answer

The brokerage firm will respond with a Statement of Answer which will detail their version of the happenings and usually ending with why the claim is not justified, or what is the correct position.

Of course, if they accept the Statement of Claim then the matter ends with them paying the required compensation.

3. Arbitrator is selected

Once the opening positions have been articulated by both parties, the process of selection of arbitrators gets underway. The larger the amount in the claim, the more the number of arbitrators.

A prehearing conference is also arranged after the arbitrators have been selected where the attorneys of the two parties will agree on procedural matters and set the date for the hearing.

4. Information is shared/ exchanged

The sharing of information and evidence gets underway. The facts, and the evidence of them being facts, is presented to the other party. It is possible that a settlement is hammered out at this stage, avoiding the subsequent steps.

In any case, your attorney needs to be prepared for the final hearing, whenever it has been set for.

5. Final hearing

This is held in the presence of the selected arbitrators. This goes a step beyond the exchange of information as it presents an opportunity for cross-questioning as well as examination.

Once arguments have been completed, the arbitrators will adjourn and meet at an appointed time to deliberate over the case and reach a decision. They are expected to render a final decision within 30 days of the final hearing.

6. The award

In the event the award is in your favor, the brokerage firm will be given a period of 30 days for settlement.

What do you do if you are not happy with your financial advisor?

There are many reasons why people are not happy with their financial advisor or broker. If the reason you are unhappy is because of a personality conflict, then you can always get advice from another financial advisor. However, if you are unhappy or worried about the advice given may be bad, then it is best to contact an investment fraud lawyer. Our firm offers a free consultation to determine if there is anything fraudulent or bad happening to investors.

How do I complain about a financial advisor?

Investors can file complaints with FINRA. If the issue regarding the handling the account or personal issue, then investors can complain to the branch manager or compliance department.

How do I complain about an independent financial advisor?

Investors can file complaints against independent financial advisors or brokerage firms through FINRA or the SEC. It is best to consult with an attorney to find the right regulatory agency to file the complaint.

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