Financial Adviser Misconduct

Disputes between financial advisers and their customers are generally adjudicated through binding arbitration through the Financial Industry Regulatory Authority, or FINRA. Most arbitration cases involving financial advisers involve misrepresentations, excessive fees, theft or unsuitable investments.  These cases are normally only filed against the broker-dealer that employed the financial adviser and not against the individual financial adviser directly.

If you or someone you know lost money because of the misconduct of a financial adviser, you may have legal recourse. Contact our office for a free and confidential consultation.

Can I sue my financial adviser in court?

Generally, no. Most new account forms for stock brokers and financial advisers have mandatory arbitration provisions.

Is my financial adviser a fiduciary?

This is a more complex question than most investors realize. Anyone registered as a financial adviser under the Financial Adviser Act of 1944 is, but others may not be – it depends. The only way to know for sure is by calling FINRA, the Securities and Exchange Commission or the state where they do business to ask.

My financial adviser said they do not charge me commission, could this be right?


How do I know if my stock broker or adviser is licensed?

You can contact FINRA to verify their license status.

Are financial advisers required to maintain liability insurance?

There should be a law requiring all financial advisers to maintain liability insurance. However, there is currently no legal requirement that financial advisers maintain liability insurance.