When the advice didn't fit the person it was given to

Advice that didn't fit your life

A broker who recommends an investment has to have a reasonable basis to believe it is in your best interest, given your age, income, other savings, goals and how much risk you can bear. The federal rule on this is called Regulation Best Interest, and FINRA has its own suitability rule along the same lines for accounts that rule doesn't cover. A recommendation can break those rules even if the investment itself was legitimate: a sound product can still be the wrong one for you.

Trades you never approved

Unless you gave your broker written authority to trade without asking you first (called discretionary authority), they generally need your approval for each trade. Trades that appear on your statement without a conversation are worth writing down, with the date you first noticed them and anything you said to the firm at the time.

Too many trades, or too much in one place

Two other patterns come up often. The first is excessive trading, sometimes called churning, where an account is bought and sold so often that the commissions and costs mostly benefit the broker. The second is overconcentration, where too much of your money sits in one stock, one sector or one type of product, so that a single bad turn does outsized damage.

The firm's responsibility too

Brokerage firms are generally expected to supervise the people who work for them. When a broker's conduct should have been caught and was not, the claim is often against the firm as well as the individual, which can matter a great deal when it comes to whether any award can actually be collected.

What helps to have ready

• Monthly statements covering the period before, during and after the losses.
• The new account form, which often records your stated goals and risk tolerance.
• Trade confirmations for the investments you're concerned about.
• Any written trading authority you signed.
• Notes, emails or texts about what the broker told you and when.
• A simple summary of your finances at the time: age, income, other savings, what the money was for.

• What to have ready before you talk to a lawyer

  A short, practical list you can use for any kind of problem.

Where we fit in

A lawyer at our firm looks at your case. If we take it and another firm is better placed to lead it day to day, we choose that firm from firms we have vetted for their expertise and track record, and we stay responsible for your case with them.

Questions people ask

This may also apply

• Investments that were not what you were told

  If the investment itself was a sham, not only a poor fit.

• Money an executor, trustee or relative took

  If the account belonged to a trust or an estate.

More about money lost with a broker or adviser

• Money lost with a broker or adviser: overview
• Investments that were not what you were told