Solving Conflicts with Your Brokerage Firm


Market fluctuations cause many investors to question their investment strategies and even confront their brokers. In some cases, this may lead to conflict. If you are having difficulty with your brokerage firm, it is important to understand the dispute resolution process available to you.

Moreover, there are also various internal measures you can take to attempt and settle the issue without having to enlist legal assistance.

Most brokers are good people and will try to help you resolve any issues. Remember, you hired them to be an ally and trusted advisor.

You cannot control the market nor the decisions made by other investors, but you can control how you respond to a conflict with your brokerage.

Remember: All Investments Carry a Risk


When you invest, you are taking risks. While these risks may result in high rewards, they can also lead to losses. It is important to understand that any investment involves a certain amount of risk and that no matter what your broker does, the outcome cannot be guaranteed.

Sometimes a dip in stock might just be a short-term hiccup and other times it may result in a long-term decline.

Related Read: Ethical Investing ─ The Bridge Between Morals And Profits

Make Sure Communication is Clear and Present


If you don’t talk about the concerns you have, they will never be addressed. It is important to make sure you are communicating your concerns and grievances clearly and in a timely manner.

Brokers are people and can have busy lives, so try to be understanding and allow some time for a response. Most importantly, make sure your communication is in writing.

Explain the problem exactly as it happened, and provide any supporting documents or evidence if possible. It may also be helpful to provide a timeline of events so that all parties involved have a better understanding of what occurred.

Remember, the stock market and investments go up and down, so do not forget to be understanding and patient when it comes to resolving any conflicts.

Have a Clear Understanding of Your Concerns


Before you contact your broker, it is important to understand why you are having a problem with their services.

Do you feel that the advice given by your broker was not suitable for your risk tolerance or investment goals? Are there fees that have been charged without full disclosure? Have you been losing significant amounts of money?

Write down your concerns and be as specific as possible. This will help you to articulate them better when speaking with your broker.

Be prepared to provide supporting evidence such as documents, emails or other communications that can prove the problem occurred due to the negligence of your broker.

Make sure to first speak of your concerns in an email and save a copy of the communication. This will help you to keep track of the conversation and ensure that your broker is providing responses to all your questions.

Bonus: Be sure to write a clear and concise email when engaging in any sort of dispute with your broker. Use short bullet points to list the issues and avoid using any emotional language. This will help ensure a more professional dialogue.

Document All Relevant Communications

When engaging in negotiations with your broker, it is important to document all relevant communications. This includes emails, phone calls, written letters and any other type of communication.

Having a record of the conversations will help you to understand better what has happened as well as provide evidence for your case if necessary.

It is also important to keep detailed records of any losses you have incurred due to the actions of your broker. This will help you to determine the best course of action for seeking compensation or restitution.

If a legal dispute arises, having accurate and well-documented evidence is essential in order to prove that your brokerage firm acted inappropriately.

Work Through an Internal Dispute Resolution Process


Most brokerage firms have internal dispute resolution processes that can help address investor concerns.

The process usually involves filing a complaint with the firm, after which they will investigate the situation and respond in writing.

If your problem is not resolved after the process, then you may need to consider taking legal action or filing a complaint with the Financial Industry Regulatory Authority (FINRA).

Speak with a Legal Professional

If your attempts to resolve the conflict with your broker are unsuccessful, or you need a second opinion, then you may need to speak with a legal professional.

An attorney will be able to provide you with more detailed advice and options as well as advise on any potential legal action that can be taken against the broker.

If you have suffered significant losses in your investment due to the negligence of your broker, then you may be eligible for compensation, suing your brokerage firm may be a feasible option.

Most securities disputes are handled through a process known as FINRA arbitration, where the dispute is heard by a panel of experts and a decision is rendered.

If this is the route you decide to take, be sure to have legal representation.

Consider Hiring a New Broker Inside the Firm or Hiring a Different Firm

If you do decide to take legal action, or you opt for a different approach, you may consider hiring a new broker.

Obviously, the current broker is not going to be able to adequately meet your needs, and maintaining an unhealthy relationship is simply not going to be beneficial for you.

In fact, it could potentially be detrimental in the long run.

You can either hire within the same firm or find a different brokerage firm altogether.

When choosing a new broker, be sure to do thorough research and check references.

Find out if they have the proper credentials, experience, financial resources and reputation in order to meet your needs.

In addition, be sure to check their CRD number online to ensure they are properly licensed and registered.

By following these steps, you should be able to find a reliable broker who will be better suited for your individual investment goals.