Can I sue my financial advisor for bad advice that cost me a big loss?
Friday, January 27th, 2012 at
6:34 pm
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Filed under: Retirement Planning
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Probably not. Investing is always a gamble, and advisers can’t know how the market will really go. They can only make educated guesses at best. It’s actually illegal for them to know how the market will really go.
You probably signed an agreement with the firm before they took you on as a client, and it probably states that they can’t be at fault for guessing wrong.
Find that agreement and read it through.
It’s hard to say whether the advice was bad or not, because everyone has different strategies and opinions. You’d have to look at the advisor’s overall situation, and the results of his other clients, compared to the rest of the firm’s business.
everybody lost money during that time
you have no legal basis to sue anyone – no one twisted your arm to stay with him if he didn’t listen to your concerns
I got back everything I lost during that downswing within 6 months of hitting bottom – if you sold and got out at the bottom, then that is your fault
I was discussing this very matter with my financial advisor last evening and he informed me that when the market crashed, a lot of people sued their financial advisors and won. Based on what? The fact that they did not have their clients sign a form stating the advisor is not responsible for the unpredictability of the market or for their losses.
Therefore, if you did not sign such a form and you took your advisor’s advice in good faith that he has the knowledge to advise you justly and you can prove he did not, then yes, you can sue him. Afterall, he is being paid to ADVISE you properly and according to your personal wants and needs.