What to Do if Your Financial Advisor Removed You from a Mutual Fund Without Telling You
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As reported in InvestmentNews, three Raymond James entities have agreed to pay over $15 million to resolve an investigation by the SEC. The settlement and SEC order focused on Raymond James’s actions in improperly charging certain clients advisory fees when the...read more
Whether to stick with an investment or drop out is your decision, not your broker’s. They can give you advice and help you make good decisions, but it isn’t their job to substitute their judgment for your own. If your financial advisor pulled you from a mutual fund without talking to you about it, they may be making risky or expensive decisions. Sometimes, this can harm your finances or build up an unreasonable number of transactions the broker can bill you for. If you were harmed by your broker’s decisions, you may be able to file complaints and claims against them through the Financial Industry Regulatory Authority (FINRA). For a free consultation with a FINRA arbitration attorney, contact Epperson and Greenidge today at (877) 445-9261.
Broker Sold Mutual Fund Without Permission
If your broker or financial advisor sells your investments or drops you from a mutual fund without your permission, you may be entitled to various claims against them. There are multiple problems this could cause you, and several ways you may be able to claim compensation. There could be options to file lawsuits, but filing for arbitration through FINRA may be a better option.
FINRA is a regulatory board that creates rules and certification standards for investment brokers and financial investors. When they take advantage of clients, mismanage funds, or otherwise cause harm, FINRA can step in to demand compensation, remove their certifications, and otherwise enforce sanctions against the bad broker. Through this system, you may be able to make one or more of the following claims if your broker sold off your mutual fund without consulting you:
This is the clearest issue with what your broker did. In most cases, brokers should merely be advisors and helpers. They should never substitute their own judgement for a client’s, nor manage the client’s funds as if they were their own. Doing so can lead to discipline under FINRA regulations, as well as potential compensation paid to the victim of these kinds of unauthorized trades.
Breach of Contract
Your brokerage agreement lays out the terms of what decisions your broker can make on your behalf. If your financial advisor sold off your mutual fund or kicked you off the account without your permission, they may have committed a breach of contract. This could entitle you to damages based on the financial harms you faced.
Many mutual funds carry fees for transactions, especially if you sell the fund soon after your purchased it. Pushing you into paying fees like this can be a clear example of financial negligence, especially if the broker didn’t inform you of the potential cost and ask you if you want to sell.
Most brokerage agreements pay the broker based on the number of transactions. This gives the broker an incentive to push your accounts into making more and more trades, so they make more money off the account. When a broker does this, you may find unnecessary transactions or trades that you never explicitly authorized. This practice is called “trade churning,” and can be extremely expensive for victims.
What to Do After a Financial Advisor Takes Advantage of You
If you or a loved one feels cheated by their financial advisor, it is important to talk to an attorney about your options. In many cases, you may be able to file a lawsuit against the broker for their bad management of your finances or their underhanded practices. However, sometimes filing a claim through FINRA is your best option.
FINRA writes regulations and ethics rules that govern financial experts across the country. Authorized by Congress, FINRA’s rules reach far and wide to help prevent situations where brokers and financial advisors can take advantage of their clients.
If you or a loved one was subjected to unprofessional or illegal conduct by a financial expert, you may be able to file a claim against them. In many cases, your claim will move to arbitration before a FINRA board. This arbitration is similar to a trial, where there is at least 1 neutral person (sometimes 3) who will make decisions about your case. The attorneys at Epperson and Greenidge represent investors who have been taken advantage of, and fight to help them get compensation for the financial harm they suffered through arbitration.
National FINRA Claims Lawyers
The national FINRA arbitration and claims attorneys at Epperson and Greenidge represent victims of bad brokerage, illegal financial advising practices, and other predatory advice and services. If you or a loved one suffered financial harm because of bad investment advice or financial negligence, call today for a free consultation. Our number is (877) 445-9261.