Are You A Victim Of Bad Investment Advice?

If you have lost a significant amount of your savings trusting the investment advice of a stockbroker, insurance salesperson, banker, or other financial advisor, there may be something you can do to recover your losses.

Under the law, stockbrokers have a duty to "know their customers," which means that they have to take the time to learn about your assets, your needs, your investment experience, and your willingness to accept the risks of the market. Based on that knowledge, stockbrokers have a duty to recommend only those investments that are "suitable" to you.

For example, if you are nearing retirement and looking to invest your savings to provide a long-term income, an investment in risky technology stocks would very likely be unsuitable to you. It may even be the case that it would be unsuitable for a broker to place more than a small percentage of your savings in the stock market at all.

Similarly, if a stockbroker advised you to invest your savings in a complicated insurance policy (often called a variable annuity) that exposed you to high fees and denied you access to your money when you needed it, the law may well provide you with relief.

These are just two of many situations in which you may be entitled to get some of your money back.

Today, all customer agreements with stockbrokers contain binding arbitration clauses, which mean that if you do file a claim against your broker, you will not have the chance to have your case heard by a jury. The good news, however, is that an arbitration normally moves more quickly than a case in civil court, and there is no right for you or the broker to appeal. Typically in North Carolina, unless your case is settled (which happens around 70 percent of the time), your case will be argued before a panel of arbitrators approximately ten months after you file the suit.

While the lawyers for the stockbrokers fight hard to deny your claim, and it is not often that investors recover all their losses, the recoveries can be significant. And when it comes to recovering your lost savings, something is always better than nothing.