Law Library | Attorney Advertising | Financial Services | Affiliate Program | Blawg
Find the Right Lawyer Now:
Misconduct by Financial Planners
When a client puts a stockbroker or other financial planner in charge of their investments, they are placing that individual in a position of great trust: the financial planner is often entrusted with a client’s financial security. Unfortunately, being put in such a powerful position can tempt some people to abuse that power.
There are many ways in which financial planners can abuse their position of trust. First of all, a broker has a legal obligation to act in the best interests of his or her clients. A stockbroker breaches this duty by recommending investments inconsistent with their client’s investment goals or financial interests.
Some financial planners will also trade to earn commissions. However, they are obligated to recommend stock on its own merit, not based on any additional financial reward that they might receive.
One of the most common forms of financial planner misconduct is known as “churning” – it is when a broker induces a client into frequent trades, thus increasing their commissions. There are many other types of misconduct, but they share a common feature: they serve to funnel more money to the broker to the detriment of the client.
Note that losing money on an investment is not, in itself, evidence of misconduct. All investments carry some inherent risk. However, if you suspect that you have been a victim of misconduct, you will probably be entitled to get at least some of your money back. The first thing you should do is contact your financial planner in writing, explaining your concerns, and keep all copies of correspondence between you and your broker. If this does not resolve the issue, you should contact an attorney.
Consult a Lawyer - Present Your Case Now!
Find the Right Lawyer Now:
Did you find this article informative?
