Nearly every brokerage customer who becomes our client will comment that he or she feels stupid to have trusted the broker. Maybe you’re feeling the same way. Were you stupid to believe your broker or advisor?
Not at all. In fact, you were smart.
You recognized that you needed help with your money. That was smart. You probably checked around and got a few referrals. That was smart too. Maybe people told you good things about this broker, so you met with him. He sounded like an expert and he seemed very interested in helping you. He promised he’d never recommend any investment that wasn’t suitable for you and that he’d keep your money safe. He broke those promises.
There’s a good reason you were sold on your broker. Stockbrokers are salesmen. They sell products and they sell themselves, and most of them are really good at it. They portray themselves as financial gurus and trusted advisors but, first and foremost, they’re salesmen peddling products for commissions.
If your case is like the ones we handle every day, your broker made recommendations that were based on what was best for him, not for you. He didn’t tell you everything you needed to know. And some of the things he did tell you probably weren’t true.
You were entitled to trust your broker. Since all brokerage firms market their representatives as trustworthy and competent financial advisors, their customers are entitled to repose trust and to expect competent financial advice. When a broker commits a breach of trust or makes unsuitable recommendations, that broker has betrayed the investor.
No investor betrayed by a stockbroker should ever feel stupid. Angry? Yes. Determined to fight back? Absolutely. Stupid? No way.