N.J. couple pays dearly for financial advice
55 RepliesJump to last post
[quote=SFEZ]
suitable, docs legit, diversified.
I bet they get zero.
here is the lovley couple.
they sent this story to something called "Bamboozeled"
poor people. helpless
[quote=Shania Twain] [quote=SFEZ]
suitable, docs legit, diversified.
I bet they get zero.
here is the lovley couple.
they sent this story to something called "Bamboozeled"
poor people. helpless
[/quote] Look, they called the FA almost daily throughout July and August....... They called the branch manager in November....... They called a client resolution specialist (compliance?) in December..... In all cases it seems that nothing was sold.......as the account value continued to go lower month after month..... I'm not saying the initial allocation was wrong.......or that the clients aren't full of sh*t about their lack of knowledge.......BUT, if you have a high number of calls, spread throughout different people......and nothing was done......Then, I'm sorry to say, teh checkpoints that are in place failed......
“Additionally, Mr. and Mrs. Moskvin expressed their concerns regarding news reports they had heard concerning an impending economic downturn.”
Does anybody remember reading news reports of an impending economic downturn back then? There were a few, but not many. I'd love to interview the FA at JPM to see what he recalls about his conversations with these people before the transferred their account to WS. I'm sure he would either corroborate their story about being primarily concerned about safety of principal or completly blow it out of the water and say they wanted equities for short term investing - one extreme or the other. I'd also love to see a hypo of what their exact investments would have done had they not sold one day away from THE bottom. Either way, if the repeated calls can be verified, they have a valid case.[quote=mlgone]So they were down 23% (if it was all invested).
"Thinking they had no alternative, the Moskvins liquidated their account on March 6, losing $226,865.86." Geez............just right about at the low on the S&P (March 9). Probably missed the entire rebound....... Who says people don't need advisors?[/quote] You got that right. I'm betting the author is failing to mention that if the clients had waited the timeline they indicated - two years - they would have come out just fine. That said ... the advisor got what he deserved. You move financially mental midgets from CDs to a portfolio including equities in a two year timeframe ... you got rocks in your head.
[quote=SFEZ] [quote=Shania Twain] [quote=SFEZ]
I’m not saying the initial allocation was wrong…or that the clients aren’t full of sh*t about their lack of knowledge…BUT, if you have a high number of calls, spread throughout different people…and nothing was done…Then, I’m sorry to say, teh checkpoints that are in place failed…
[/quote]
I do not think calling in etc means anything legally. I actually think it would work to their disadvantage.
Why did you not sell then?
[quote=LockEDJ] [quote=mlgone]So they were down 23% (if it was all invested).
These are not financially mental midgets. These are calculated people. (look at the guy. bet he has an Armani knock off suit from Sims)
No personal responsibility.
get what you can
anyway you can
Got into market at wrong time. call a trial lawyer. make stuff up
its America
In my opinion
They called daily thru July and August? Please.
you call me 3 days in a row bitching, I blow you out of everything. and this broker had the patience to listen to them for 60 straight days ? i doubt the veracity of their story. i.e bullsh!t.[quote=Shania Twain] [quote=SFEZ] [quote=Shania Twain] [quote=SFEZ]
I do not think calling in etc means anything legally. I actually think it would work to their disadvantage.
Why did you not sell then?[/quote] Calling in does mean something........no doubt....... For starters, if a client calls you to complain about the market, that they are scared and are thinking of selling everything.......your first reaction is probably to calm them down, remember their time horizon, and assure them they are in good, solid investments that have good track records...... BUT, if they continue to call in.......day after day (or even 2x per week), for 2 months straight, then I'm sorry, but you MUST take action.......even if you think that the investments will come back......you MUST become more conservative in that case.... Does that mean to sell everything? NO........ But, it should trigger a concern that these people's current concerns need to be addressed......and then, later on......you can choose to dump them as clients.......But, at the time, you have to address the situation, and move some stuff out of risk and into safer investments..... Even if they are full of sh*t, Even if you are in 5 star funds, even if you are in investment-grade fixed income........When they call and question suitability, you have to dot all your i's and cross all your t's.......I don't think that was done here..... That's my opinion........
“We’re devastated and we feel we were misled in our trust that we put in this man,” said Claire Moskvin. "It’s a terrible feeling of betrayal and it’s been extremely stressful. We wouldn’t wish it on anyone."
oh palezzzzzzz.
You flip NJ house for a million. I bet they made a ton.
Sfez, during the darkest days of the bear mkt, did you have clients call you DAILY wanting out. for 60 straight days. 30 straight days. 10 straight days. prob not, cause you would have sold out after the 5th or 6th call.
thats why those daily calls to that broker never happened. unless kleiner's first name is Job.[quote=clang]Sfez, during the darkest days of the bear mkt, did you have clients call you DAILY wanting out. for 60 straight days. 30 straight days. 10 straight days. prob not, cause you would have sold out after the 5th or 6th call.
thats why those daily calls to that broker never happened. unless kleiner's first name is Job. [/quote] I agree........I would get them out (of at least some or most of their risk) after a few calls.....no doubt.....I might think they were totally wrong, but I would do it But, the story claims that they then spoke to the branch manager and the client resolution specialist (sounds like compliance to me)........ How do you explain it getting that far without the account being liquidated...... I never had a client initiate a call to my BM........If I sensed a problem, the priority was to nip it in the bud.......Not defend my investment choices by insisting they hold.......[quote=Shania Twain] [quote=LockEDJ] [quote=mlgone]So they were down 23% (if it was all invested).
These are not financially mental midgets.In my opinion[/quote] Maybe I misspoke. They claim to be financial novices. Maybe they are most conniving jerkoffs this side of Bernie Madoff. It doesn't matter. Their complicity does not free the financial advisor from engaging his brain at some point in this setup. I stand by what I said. The FA's an idiot and he got greedy. Seven figures does that to you.
My prediction: They will get money in a settlement with the firm, unless the FA has some fecking AMAZING evidence.
My prediction: They will get money in a settlement with the firm, unless the FA has some fecking AMAZING evidence.
Your compliance, so let me ask you … let’s assume Wachovia has some sort model that shows it fits their risk tolerance profile. You’d have to think that, if the OM took the call and cleared the FA.
These jobbers said they had a two year window. That’s December, 2009 and I’m pretty darn sure that portfolio recaptures it’s losses by last month. They bail before hand, doesn’t that make them at least partially to blame? I’m asking, not be sarcastic or anything.
That is difficult to say. On the one hand, this happened during the worst financial meltdown since the Great Depression - which has caused every compliance officer to serious rethink what is suitable. When I got into compliance, the general rule was that an "aggressive" investor can stomach a 20% loss (which I laugh at now). Odds are Wachovia had a suitability alert system that is based on standard deviation of the investments, and odds are that measurement was thrown out the window with how messed up the markets were. So Yes, Wachovia could have thought the portfolio was suitable (based on their model), but clearly it wasn't. But I can't say any of this mess is their fault, with what has been presented in the article. As compliance, we want FAs to look for red flag behavior and get a good since of their client. The fact that these clients finally had enough and sold at the lowest part of the market was predictable behavior for people with that risk tolerance and investment goals. Now if they lied about their goals, and Wachovia had supporting documentation (like an Investor Questionnaire), then that goes a long way. So from a compliance perspective, if everything stated in the article is accurate, then the guilty parties are 1) the FA for suitability and 2) Wachovia for failure to supervise. (I could have overlooked other issues).[quote=Wet_Blanket] My prediction: They will get money in a settlement with the firm, unless the FA has some fecking AMAZING evidence.[/quote]
Your compliance, so let me ask you … let’s assume Wachovia has some sort model that shows it fits their risk tolerance profile. You’d have to think that, if the OM took the call and cleared the FA.
These jobbers said they had a two year window. That’s December, 2009 and I’m pretty darn sure that portfolio recaptures it’s losses by last month. They bail before hand, doesn’t that make them at least partially to blame? I’m asking, not be sarcastic or anything.
During this meeting, they informed him that they were looking to preserve the capital they had acquired through the sale of their house for approximately one to two years, at which point they anticipated purchasing a new home,"
Nothing but cash equivalents would have been appropriate in the eyes of FINRA. Maybe a super short duration treasury fund. That would be it. But it boils down to he said/she said. Who can prove what.This would not be an a problem if the client made 20 percent in the market. Every client wants 20 percent annual return with no downside
Thanks, Wet. I can see where I was going with my line of reasoning was off-base.