N.J. couple pays dearly for financial advice
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people do not read what we shove in front of them; I bet they signed off on all the risk disclosures etc and they will get ZIP
[quote=Bud Fox]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.[/quote] Have to agree with Finra on this one... Two years and they wanted to use the money to buy a house... nothing but cash, cds, treasuries is where I would have put the money...My question is... That is what they had set up at JP Morgan, why change?[quote=chief123]
Have to agree with Finra on this one... Two years and they wanted to use the money to buy a house... nothing but cash, cds, treasuries is where I would have put the money...My question is... That is what they had set up at JP Morgan, why change?[/quote] They changed brokers because of "service" levels. Which, to me is code for "the advisor wasn't making enough money for me". Either they refused to listen, or in the greed and haste of the Wach broker, he failed to clearly tell them what making increased returns entailed. I'm guessing the latter. The rep knew the people didn't understand, didn't want to pass up on the deal, and pushed through what he knew was a bit leaky.I agree. Document everything. If you have a particular client that seems like they could potentailly go down this road, write up a summary of all conversations and decisions made and provide it to them. Extra points if they sign it. Also, be extra careful to document when they don’t take your advice.
Since we are only hearing one side of the story everything is guesswork. My opinion:
1- The comment that in April of 06 they heard the economy was on the verge of collapse is complete BS! I cannot remember one major media outlet saying anything even close to that fact and if they did they were wrong. The market peaked a year and a half later!! 2- So for 18 months they saw the account go up by 10-20% and they never said "hey this is going up alot more than a CD, what gives?" 3- Did they say to the advisor exacly what they claim? If so fry him! BUT, chances are they said something to the effect of "we sold our investment property and think the market has peaked, we are somewhat conservative, we are gettting these rates on CD's which are terrible. What can we do better?" 4- I'm sorry, but the days of a broker buying equity funds for a client who asked for CD's and safety without first convincing them to give it a shot are over. There is absolutely nothing wrong with working with a client to model their risk profile. If a 35 yr old came into your office and said I want to roll 6 month CD's in my roth for the next 30 years because I am conservative- would you just say OK done, or hey lets talk about risk/reward/time. If a client comes in your office and says "I want safety of principal" and your show them all of the relavent articles talking about inflation, taxes, performance over time etc and they change their mind to a moderate growth strategy and sign a document to that effect, are you wrong? Did you act improperly for helping them understand the different typres of risk and their effects on financial assets? 5. They last the whole way down w/o saying "that's it SELL" until the VERY bottom? BS! I had quite a few people call me that week saying "sell" or "I'm scared", only one did sell and they later appologized and gave me more money (they finally went back in 2 months later). These people panic sold and then saw everything recover realizing they messed up- arb was their only way out. This is a he said she said argument. They were probably both wrong to some degree. What is total bs is they went to the media BEFORE going to arb- That might hurt them in the end...Exactly, they flip that house for $1,000,000 but did they inform the buyer of the impending downturn. These people now have a house worth $500,000. Perhaps they should sue the Moskvins.
Also what is a principal protected muni bond? When all of the insurance blewup munis went down in value too.[quote=newbroker]Exactly, they flip that house for $1,000,000 but did they inform the buyer of the impending downturn. These people now have a house worth $500,000. Perhaps they should sue the Moskvins.
Also what is a principal protected muni bond? When all of the insurance blewup munis went down in value too.[/quote] Closest thing is a Pre-Re.....[quote=newbroker]Exactly, they flip that house for $1,000,000 but did they inform the buyer of the impending downturn. These people now have a house worth $500,000. Perhaps they should sue the Moskvins.
Also what is a principal protected muni bond? When all of the insurance blewup munis went down in value too.[/quote] - nice catch !![COLOR=#0000cc] But it boils down to he said/she said. Who can prove what.
exactly
they get zero.
[quote=newbroker] Exactly, they flip that house for $1,000,000 but did they inform the buyer of the impending downturn. These people now have a house worth $500,000.
Perhaps they should sue the Moskvins.
[/quote]
haha great call
[quote=SFEZ][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...... [/quote] OR They are lying threw their teeth. I don't buy it. The resolution specialist sided with the broker???? BULLLsh*t
They will ... I would love to see that little worm buggered in public.Here’s the BS part. They left their old broker dealer because of customer service so why not just ACAT the account and leave it in CD’s etc?
If I were the broker I wold subpoena the old broker. These people are pieces of sh!t.
[quote=Ferris Bueller] Here’s the BS part. They left their old broker dealer because of customer service so why not just ACAT the account and leave it in CD’s etc?
If I were the broker I wold subpoena the old broker. These people are pieces of sh!t.[/quote]
Good catch…
My personal idea is actually that They will could possibly get money within an arrangement along with the organization, except if the FA comes with a few flecking Incredible proof.
Accountant Hawaii