Your broker is not a used car salesmen, she has duties to you her client, which include only recommending suitable investments, or investments that are appropriate for you the investor.
This means that your broker needs to listen to you and make sure she tailors her recommendations to your personal risk tolerances and investment objectives. So, how do you know if your broker is dealing with you fairly and in your best interests?
First, start with looking them up on FINRA’s Brokercheck (htttp://brokercheck.finra.org) to see if they have any prior customer complaints or other regulatory issues. Next, look for these warning signs:
- Failure to listen to what you tell them about your risk tolerance.
- Recommending non-traded investments like non-traded REITs or Private Placements
- Selling you investments that she tells you are prohibited by the firm.
- Suggesting that you put a considerable percentage of your money in a single investment
- Concentrating your investments in one market sector (like oil and gas investments)
- Suggesting you invest on margin.
- Recommending you take out a loan against your house to invest.
- That they consistently outperform the market
- That you should switch from one insurance product (like an annuity) to another.
- Unwillingness to explain the answers to questions that you have
Sean M. Sweeney is a shareholder at Halling and Cayo, a full service law firm in Milwaukee, WI and the head of its Securities Litigation team.
He represents individual and institutional investors in FINRA arbitration and court nationwide. He recovers investment losses from fraud or breach of duty from their broker-dealer.
Contact him at (414) 755-5020 or via e-mail at SMS@hallingcayo.com to see if he can help recover your funds.