Help! My Broker Sent Me Broke

Scott,

My husband died in September 2014. I was too emotional to invest the money I received, so I thought I would go with a broker to reduce my stress in those raw, grieving days. In April 2015 I gave $30,000 to a broker -- and by the end of August it was down $27,000 with just shy of $3,000 left in my trading account! I was livid. Obviously I had words with the broker.

He now has my account standing at $8,000, saying he will make it back up to the $30,000. But the damage of trust has been done. I am between a rock and a hard place. If I take out my money, he has no chance of recouping what he has lost. If I leave it there I am afraid to do any trades in case it all disappears. I suppose my question is this -- do I have any rights to recoup my losses from him?

Linda

Hi Linda,

You may as well have given your money to Tom Waterhouse to go bet with. Your broker has zero credibility and you should deal with this immediately. As in right bloody now.

Write a letter of complaint to your broker’s compliance manager that paraphrases what you told me, and attach copies of your statements. Sign off with the following: “Immediately withdraw all my remaining funds and compensate me for my losses.”

Under the dispute resolution process the broker has 45 days to respond to your complaint. So to give them a gee-up, follow your letter up with a call to the compliance officer and use the words “I’m mad as hell, absolutely livid, and I am lawyering up.”

Third, call the Financial Ombudsman Service on 1800 367 287 and register a complaint.

I can’t guarantee any of this will work, but it’s worth … a punt.

Scott