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How Well Do You Know Your Broker or Investment Advisor?

July 21, 2016 Blog

It’s a simple question, but one that most people don’t think about nearly as much as they should: How well do you know your investment advisor? Unfortunately, while there are plenty of honest, experienced advisors who make smart investment recommendations and build their clients’ portfolios over time, there are far too many others who either (i) do not know what they are doing, (ii) take unreasonable risks (often for personal financial gain), or (iii) make a living by intentionally defrauding their clients.

Consider the following examples:

  • An investment firm led by a well-known value investor lost over $2 billion of investors’ funds in a little over 12 months. The losses stemmed from the firm’s decision to invest heavily in extremely low-rated junk bonds, which ultimately led to the investors’ substantial losses. The firm and its executives are now facing hundreds of millions of dollars in liability in civil litigation, as investors are expected to recover less than 75 percent of their original investments.
  • Investors in bond funds sold by UBS recovered $3.1 million in compensation after an arbitration panel ruled in their favor. The case arose out of allegations that UBS had improperly invested clients’ assets in the proprietary bond funds and used clients’ funds as collateral for borrowing on lines of credit. The investors’ claims included allegations of fraud, overconcentration, unsuitability, breach of fiduciary duty and breach of contract.

Sadly, this list could go on and on.

Online Tools for Researching Brokers and Investment Advisors

If you are considering hiring a new broker or investment advisor (or if you have questions about your current broker or advisor), there are two important online resources you should be sure to use. These are FINRA’s BrokerCheck® and the Securities and Exchange Commission (SEC) Registered Investment Professional database.

FINRA’s BrokerCheck®

The Financial Industry Regulatory Authority (FINRA) is responsible for overseeing and regulating brokers and brokerage firms throughout the United States. FINRA’s BrokerCheck® is a free service that allows investors to research brokers’ experience, licenses, certifications, client complaints and disciplinary history. You can search by either brokerage firm or individual broker.

Search FINRA’s BrokerCheck®.

SEC Registered Investment Professional Database

Investment advisors generally must register either with the SEC or with their local state securities authority before offering their services to the public. To find out if your investment advisor is registered, you can check with the securities regulator in your state, or you can search the SEC’s online database of SEC-registered investment advisors. Similar to BrokerCheck®, you can search the SEC’s database by advisory firm or by individual advisor.

Search the SEC’s Registered Investment Professional database.

Of course, just because a broker or advisor is registered and has a favorable history, this does not mean that he or she will necessarily act with your best interests in mind. If you suspect fraud or misconduct, you should speak with an experienced attorney as soon as possible.

Contact an Investment Fraud Attorney at Zamansky LLC

If you have suffered unexpected investment losses and believe that your broker or investment advisor may be to blame, we encourage you to contact us for a free, confidential consultation. Zamansky LLC is a leading investment fraud law firm that represents individual investors nationwide. To speak with a lawyer about your situation and learn how we may be able to help you recover your investment losses, call (212) 742-1414 or submit our request form today.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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