Stockbrokers and financial advisors are regulated by the SEC and FINRA. Most complaints and most problems can be avoided if the investor understands the duties stockbrokers have to communicate. Stockbrokers have the following regulated responsibilities: fair dealing, loyalty, the duty to disclose, required authorization for trade, requirement of suitable recommendations for investments, the duty to be alert for special situations, the duty to supervise and to act in good faith. Most complaints can be avoided if the investor, you, maintains a written log of your communications. The firm in which the stock broker practices has a supervisory responsibility and a duty of good faith. It is a responsibility of the investment advisor to communicate to the client, it is client’s duty to accept and respond.

Claims of communication failure in themselves are not actionable without improper acts or failures to act on the part of the investment advisor, financial advisor. If you are dealing with an independent advisor that is an investment counselor, who is not affiliated with a major brokerage house their compliance program may not meet the regulatory standard. If you have been the victim of stockbroker fraud you may have an action not only against the individual who you claim acted in a fraudulent manner, but his principal: that is a stock brokerage firm. Approaching communication failures successfully usually requires you begin with a communication, not necessarily between you and your financial advisor, but a failure to communicate from your advisor to their brokerage house... Most arbitration won on claims of communication failure is litigated with the focus on the failure of the financial advisor to communicate with their regulatory supervisors. Engaging the brokerage house in this venue is more likely to succeed because they do have an affirmative duty to maintain communications and records concerning the activities of their brokers.

The most common complaints are: trading without permission, representations such as guaranteed sure winners, suggestions or assertions of insider information and misrepresentation of risky investments. If you claim a failure to trade you out of a position you need to assert specific instructions were made and not completed. In South Florida, Fort Lauderdale, Boca Raton, and West Palm Beach, the individual brokers are often unable to communicate directly with the client’s; there is no substitute for effective communication. To protect yourself you should maintain a written log by date and hour of instructions you directed to your financial advisor. You should also maintain a log of communications received from your advisor in which they communicate to you assertions of value and their reasons for trade recommendations.