As an investor, you entrust your hard-earned money to a financial professional under the assumption that your broker or advisor will act in your best interest. Unfortunately, disputes do occur between investor and broker, for a variety of reasons. To protect yourself when investing, it’s imperative that you understand your rights as an investor.
According to the North American Securities Administration Association (NASAA) Investor Bill of Rights, when you invest, you have the right to:
- Ask for and receive information from a firm about the work history and background of the person handling your account, as well as information about the firm itself.
- Receive complete information about the risks, obligations, and costs of any investment before investing.
- Receive recommendations consistent with your financial needs and investment objectives.
- Receive a copy of all completed account forms and agreements.
- Receive account statements that are accurate and understandable.
- Understand the terms and conditions of transactions you undertake.
- Access your funds in a timely manner and receive information about any restrictions or limitations on access.
- Discuss account problems with the branch manager or compliance department of the firm and receive prompt attention to and fair consideration of your concerns.
- Receive complete information about commissions, sales charges, maintenance or service charges, transaction or redemption fees, and penalties.
- Contact your state or provincial securities agency in order to verify the employment and disciplinary history of a securities salesperson and the salesperson’s firm; find out if the investment is permitted to be sold; or file a complaint.
If an investor has been declined any of these rights by a broker or a firm, that may be a “red flag” that the broker or advisor might not be acting in your best interests. If you have not yet invested with that broker or advisor, it might be wise to select someone who does respect your rights as an investor. If you have already invested, it would be wise to have an independent broker or advisor review your investments to determine whether they are appropriate for your particular needs and circumstances. However, it’s important to remember that you are taking a risk when investing, and simply losing money is not, by itself, grounds for a lawsuit.
Avoid possible disputes in the future by choosing the right broker or financial planner. Research the firm and the individual who will be handling your accounts by looking up their history and any past disciplinary issues. Once you’ve chosen a financial professional you can trust, keep an open line of communication. If you don’t understand an investment, ask questions. If you don’t feel comfortable with an investment, express that to your broker.
If you believe you have a legitimate complaint against a financial professional, you may want to report the individual and/or the firm to the appropriate oversight organizations or government regulators. For example, complaints against a stockbroker need to be filed with either the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). If the conflict involves a certified financial planner, you can file a complaint with the Certified Financial Planner Board of Standards. You can also contact your state’s securities commission.
If you’ve exhausted all of these avenues to no avail, the next best course of action would be to hire an attorney. If you believe you have been denied your rights as an investor by a broker other financial professional, contact our experienced attorneys for a consultation.
