Investing: Harmed Investor Gets Justice Article

	1888 Articles Home \| Finance Articles \| Investment Articles	Investment RSS
Investing: Harmed Investor Gets Justice

This article is about investor receiving justice on bad investment and incompetent fianancial advisors.

Author: Jeffery Voudrie

Article Tools:

Countless investors have lost large portions of their investments. Some have been in investments where they lost everything. But investors looking for help in recouping losses often find there are few places to turn for assistance. Read on to learn about one investor that finally got justice.

Many an investor has been harmed by their advisor’s inaction or being put in unsuitable investments. It’s natural that those feeling wronged seek retribution. So, where do investors turn if they need justice?

For securities investments such as stocks, bonds, mutual funds and variable annuities, it’s to the National Association of Securities Dealers (NASD).

The NASD is a self-regulatory organization created by the securities industry, not a government agency.

In 1987, the Supreme Court ruled that investors can be required to waive their right to sue in court in order to open a brokerage account. Now all grievances with a brokerage firm must first go through arbitration

Fifty-five percent of arbitration cases rule in the investor’s favor. But the average settlement is about 12 cents on the dollar. It so happens that the judges (even those deemed to be independent) are from the securities industry! No wonder brokerage firms prefer arbitration!

It is a long, expensive process to pursue arbitration on an individual basis. When you look at the average settlement, you will be lucky to cover your legal expenses. Your chances can be greatly improved, though, if you are one of many members in a group that had similar experiences with the same broker or firm. Think of it as class-action arbitration.

That’s how Bob finally got justice. He invested $750,000 in a variable annuity recommended by an advisor in 2000. Three years later Bob’s investment was only worth $350,000. When Bob became my client in November of 2002, there was little recourse he could take.

About a year later, though, he saw an advertisement in the local newspaper about a seminar just for those retirees of his company. It was put on by an out-of-state attorney that specialized in handling arbitration cases.

It turns out ‘Bob’ wasn’t the only victim. Many of his fellow retirees used the same advisor that he did. Almost all had virtually the same experience.

Collectively, they were able to get more of the attention they deserved during arbitration.

After 3 long years, Bob has received a settlement check for $166,000. It doesn’t make Bob whole, but it sure helps ease the pain. Bob was one of the lucky ones.

Guess what happened to the broker? Not much. There won’t even be any hint of the problems he caused on his permanent record. That means other investors will never know what this advisor did to ‘Bob’ and his fellow retirees. That means it can happen to them, too.

You see, the advisor you use could have lost investors hundreds of thousands of dollars and you will never know about it. There’s no way to know if your advisor has had cases go to arbitration in the past. There’s no way to know if he/she has any current cases in arbitration.

So what can you do to protect yourself?

First, ask your advisor if they have ever had any written complaints and/or cases that went to arbitration. Verify their answer and/or do a broker check at www.nasd.com.

Second, find out how the advisor will monitor and manage your investments on a day-to-day basis. Beware of the advisor that does nothing. Look for an advisor that has specific procedures in place to monitor and manage your account. Few do.

Third, make sure you have the ability to make changes should something go wrong. That’s why I am so adamantly opposed to investments that have long-time commitments or big surrender penalties. They limit your options, making it expensive to switch investments down the road.

Fourth, if you’ve been wronged, try to see if there are others in the same boat. Search the internet for existing class-action lawsuits and see if you can join.

Typically, the problem is the advisor, not the type of investment. Use one that will prevent a significant loss from happening in the first place. Bob was able to recover a portion of his loss. Justice was served.

Have a financial question? Send me an email and I’ll personally respond, free of charge. Go to www.guardingyourwealth.com and click on ‘Ask Jeff’.

In addition to being a nationally syndicated columnist and Certified Financial Planning Practitioner, Mr. Voudrie provides personal, private money management services to clients nationwide.

About Author

As a Certified Financial PlannerTM and a Certified Estate Planning Professional, Jeff deals with the complex real-life issues his clients and readers face on a daily basis. He has taught thousands how to get back and stay on track through financial courses and seminars. His 'outside-the-box' approach allows him to get into readers' hearts and minds. Jeff's insightful and highly-acclaimed newspaper column, Guarding Your Wealth, is syndicated in over 50 publications across the country, and reaches out weekly to over 5 million readers. He has appeared on the CNN Financial Network as a guest expert and has been interviewed in such stellar publications as The Wall Street Journal, The Christian Science Monitor andThe London Financial Times, to name just a few. He can be reached at jeff@guardingyourwealth.com or by calling 423-913-2950.

Article Source: http://www.1888articles.com/author-jeffery-voudrie-3107.html