johnlvs2run
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Not unless it's a managed protfolio or discretionatry portfolio. In an advisory or execution only relationship the responsibility ends at the trade. i.e it must be suitable for the client at the time.
Linneyb
Thanks for replying, my portfolio is managed by an "Investment Executive" for "X" and Company, llc, Member NYSE, SIPC. I am devasted she did not at least call me, she invested all the money I had.
Thanks for replying, my portfolio is managed by an "Investment Executive" for "X" and Company, llc, Member NYSE, SIPC. I am devasted she did not at least call me, she invested all the money I had.
Magos
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I think you should pick up the phone and call your lawyer
it depends what sort of account you have. The word "managed" probably means nothing of the sort. It just means she/he picks up the 'phone and talks to you! I don't know the US rules but I am sure you could find out from the SEC what the client classifications are. In the UK we have Discretionary managed, non-discretionary managed, Advisory and Execution only.
Although this may have changed under MiFID to Professional Client and Retail Client (Advisory and Execution Only).
Basically you need to find out what the service to you involves. Normally a broking service is non-discretionary advisory. This involves the broker talking to the client, instigated either way, agreeing purchases (or sales). The brokers obligation is to make sure the investment is suitable for the client's risk profile, net worth etc. Once the trade has been executed the brokers obligation ceases. i.e. there is no responsibility on him to monitor the investment to see if it is still suitable. I suppose there is some responsibility if the stocks drop out of the client's suitability profile. Also if the client 'phoned for advice after the shares had fallen the broker would be obliged to give his opinion.
However, if your account is a managed protfolio (particularly if discretionary) then there must be an obligation to manage the protfoilio, particularly if it is losing a lot of it's value.
The other point is that you say the protfolio has lost $80k. Is that good or bad in these markets? Have you got mainly stocks that will recover as quick as the market recovers?
Thankyou for the reply. I started w/200,000, saw the market sinking in Spring and I asked my broker if I should pull out. She said "no, just ride it out". I have stock in electric co's, lumber,Smith-Kline, Johnson and Johnson and many more. Pretty spread out. When trades are made for me she does not call me.
You have got to establish what sort of account you have got. Did you fill in an application form? Did you tell your broker what your financial situation was? Did you tell them what your investment objectives were, what your risk tolerance was? If not, how did they know what to buy? In the UK you would have to have to have agreed to a discretionary account, otherwise the broker must 'phone you and, on his suggestion/advice you agree or not to trade. Otherwise they can be sued to hell. There must be a complaints procedure. 'phone or write and complain and ask for an explanation. If no joy go to the Financial Authority that supervises investment advisors. Presumably their 'phones are taped, if not they will have a hard job defending any of their actions as the client is always right unless proven otherwise (in UK anyway)
