Sorry if a word slips in here but I finally sucked it up and started putting my dad's stock sales on his taxes. The "nice" broker consolidated his two accounts into one. Nice isn't it? Yeah but he closed both and opened a new one, the result over 100,000 in brokerage fees. If I were capable of spitting nails I would be spitting nails!!!
Before anyone asks there is no recourse to recover. I don't even know how to handle this. My logical side is screaming stop letting dad make financial decisions, the daughter side is saying chill, it is his money to lose.
So since I must ask a question, what would you guys do?
Alright! Clearly I can't read, it wasn't that bad, he sold that much stock, duh, the fees were pretty high but not so bad. Stand down, no one has to be hurt and brothers need not be called. :)
Tell me again why my dad didn't give me his tax stuff back in March.
Called dad, all nice, we talked, that was total sales for the year less brokerage fees. He has never traded that much since I started doing his taxes but pretty much a mess of notes were redeemed. I believe this was a case of overprotective daughter mixed with looking at wayyyy too many numbers......
I would run it up the flagpole! Take it to the highest level of management, that amount for 'fees' is questionable.
My husband, who works in this field, says to speak with the brokerage manager and tell them that, due to his age, your father isn't as able to handle his finances as well as he once was. Ask them to refund some or all of the fees that his account has been charged. Threaten them that you will transfer your father's accounts into another brokerage house if they do not comply.
E.
I am beyond pissed on your behalf, J., for what it's worth. I hope you'll keep us posted on what happens next.
My college roommate is an attorney in NYC, and she specializes in securities law. I texted her and she texted back that your father may have some legal recourse, depending upon the state he lives in and what exactly happened. You need to find a good securities attorney, and fast (she said statute of limitations is determined from the time the client received paperwork regarding the transaction). If I understand correctly, your dad's broker churned the account, which can be illegal (and is definitely unethical), especially in the context of a retirement account. Good luck!
Did you ask your dad if he was told by the broker about these brokerage fees before he decided to do the consolidation? With such a huge loss, I would ask your dad if he would allow you to be his power of attorney. You could then make the financial decisions for him. Yes, $100,000 is HIS money--but, you never know what he future holds. That 100K could be your inheritence or it could be used to care for your dad should he ever need it. I'm no financial expert nor am I familiar with how brokerage firms work, but I was a paralegal so my first inclination would be to contact an attorney. You could also file a complaint to the Better Business Bureau and the Attorney General's office in your state. Honestly, it sounds to me like your dad was taken by this "nice" broker.
Switch brokerages.
I'm familiar enough with trading and taxes to know of which you speak.
Any brokerage that would churn a file like that....well I would do two things. Report them and change brokerages.
The report may not go very far, but then I'd also recommend Angie's list and some of the other consumer driven type sites. And hell, the state/federal agency you report them to may have some other solution we don't know about.
Well, honestly, I don't know too much about this stuff, but if your dad is elderly and he went to this appointment by himself and the broker "pushed" him into this deal...that's fraudulant behavior and totally unacceptable. I understand that there is no recourse but a talk with your dad AND the broker may be in order. What does your dad say about all this? Did he know this would happen, how was it explained to him, etc.? If you get a bad feeling from the guy, I'd go to his supervisor for sure and probably not let Dad go to meetings alone. Maybe just you being there and making sure the situation is understood is a balance between dad still being in charge and you taking over. Sorry to hear this, though! Hope you figure it out!!
*Gulp* is that $100k in brokerage fees?? If so, I'd flip an absolute lid over that one and probably give a call to the broker's supervisor immediately. Good luck, that makes me sick to my stomach!!
I don't blame you. It's ok to be mad when you feel like your parents are being taken advantage of.
What do I do? Well, I spent 10 years in the banking industry doing everything under the sun, from loans to IRA's, from the deposit side, customer service and loan spectrums. It's amazing I came out of it sane. People are never so nasty as when you are dealing with their money or children.
Now I am a SAHM, and an author. Which both still might drive me insane but in a much better way. :)
Call the tool! Er.. Um... Brother.
Maybe theres a way to spin it to pops that would increase his pride rather than squash it?
You know, dad, at these executive levels you're in now, brokers often assume your 'team' will be going over the details... And they just assume that they'll be keeping track of all the details. Since there's no way you'll be able to convince them you're solo, not with these numbers/portfolios/etc. it might be a good idea to go ahead and get a team set up. Etc... ?
J., it sounds like the broker churned his account. It would take money, but you could hire a lawyer to take the firm and the broker to court. He would have to submit to arbitration (no jury trials for this) but if indeed your father did not understand what the broker was doing, and it cost him losses like this just to "consolidate" accounts, this broker needs to be fired, and he and his firm need to pay your dad back.
Do the legwork - gather all of the statements or print them online. Did he sell stocks and then buy the same ones or similar ones? Did he buy short term and sell for a little profit, with commissions adding up to more than the sell made for your dad? How sophisticated an investor is your dad? Look up the Prudent Man Rule. If your father was not set up to trade stocks in a speculative manner, that will go to his favor as well.
You really need to find a lawyer who does this kind of work and talk to him. Perhaps with showing him all the statements and doing a spread sheet to show him what the broker did (buys and sells against each other, etc - I know you are good at that), he would take on the case for a percentage.
So sorry.
Dawn
Hi you don't say how old your Dad is, but the first thought I had, is 100K is a lot of money, is he still competent to handle his own affairs.... You might want to talk to an attorney who specializes in elder care to see what your options might be...
Talk to your Dad when you are more calm and see what the broker actually told him. It could be that your Dad gave his consent because he thought the fees would be minimal, or for some other reason altogether. Until you ask you won't know.
Good luck.
If he is with one of the big brokerage accounts I can't imagine this sliding. Either way, That is crazy! It shouldn't cost in fees to move money around inhouse like that! I'd definitely pursue it until it was resolved. Threaten to move all his money! Talk to the guys boss, manager of the branch, whomever at what title. HECK if no one thinks that's a lot of money, once you recover it if you do you could donate it!
Wow, that is just horrible. I do not know how a person with any moral and ethical values could do this to someone, especially an older person.
I would be very upset too, definately once you calm yourself a bit, talk with your dad and ask him if he understood what happened. Either way, if he did or did not, if he would not be offended, ask him if you and he could go speak with the broker as you can not understand why this would have ever of been a viable option. You want to help him and "see" what kind of broker he has entrusted his hard earned money to, as this appears as a NOT very wise move, actually it seems as though the only person winning here is the broker.
