‘I was so mad.’ My financial adviser moved my investments into cash in June 2022 without consulting me. What should I do?
Answer: I’m so sorry to hear you’ve had this experience — and what your adviser did is not OK for multiple reasons, including the advice to go all cash and his not even telling you about it. Firstly, “I’m a little alarmed that your broker suggested going to cash at all last January or July or even now, as that’s an extreme response in terms of portfolio management strategy, particularly as inflation was approaching double digits a year ago,” says certified financial planner Curtis Pope…
What’s more, even “setting the actual advice aside, I’m more concerned that your adviser took full discretion and sold out of everything in your account without having a conversation with you first,” says Pope.
In certain cases, at certain firms, an advisor can have full discretion over the account and can have the ability to trade without approval. “You should start by trying to verify whether or not the account had been set up as a discretionary account. Even if it had been, they probably still should have contacted you since they made such a drastic change to the portfolio strategy and there could have been meaningful tax implications for you,” says Pope.
Discuss this situation with your broker to clarify the details and then file a complaint with their supervisor if you decide it’s warranted. “Generally these sorts of internal complaints are taken very seriously. If you don’t hear back from the firm, your final option is to go directly to FINRA (Financial Industry Regulatory Authority), which will certainly get everyone’s attention,” says Pope.
