When To File A Formal FINRA Complaint Against Your Advisor?

Investing your money is one of the clearest paths to financial wealth and freedom. Not all investments are made equal, and when you invested your money with a financial advisor or broker that’s caused you to lose a large amount of money it can feel like the whole world is crashing down on you.

Even though it may feel like you are being singled out, realize that investment loss is a very real situation for many investors. That being said, that doesn’t mean that you don’t have to simply say goodbye to the hard-earned money you’ve made over the years.

The Financial Industry Regulatory Authority, or FINRA for short, is a governing body that regulates all activities of brokerage firms. FINRA deals with bad practices or fraudulent acts by brokerage firms and helps investors, such as yourself, protect their investments as well as regulate financial advisors and brokers, making sure they follow their code of ethics.

In this article, learn how to file a formal FINRA complaint to help you resolve the issue and possibly recover your losses.

FINRA Complaint Advisor Header Image


Common Financial Advisor Complaints

Financial advisors are obliged to follow a code of ethics (here’s FINRA’s Code of Conduct) which is to uphold integrity, professionalism and to practice competence and confidentiality.

As an investor with a relationship to a financial advisor or broker, it’s important to be familiar with the scope of their duties and responsibilities so you can easily determine if there is already a breach of what is expected from them or if there is negligence on their part.

Here are some of the common financial advisor complaints that are good-to-know information if you’ll be working with one. This will serve as a signal for you to file a formal complaint against them.

1. Misrepresentation

This is when an advisor deceives you utilizing false claims and information to convince you to invest or buy a property that would, later on, lead to loss. You may complain about your advisor under misrepresentation if they do any of the following: unauthorized trading, inappropriate recommendations about investments or insurances, or excessive use of margin.

2. Unsuitability

This happens when the financial advisor makes a wrong investment strategy based on your investment portfolio. For example, when your money is invested in high-risk security investments, you still have a low-risk tolerance. With this, there are high chances of loss of capital.

3. Churning Issues

In some cases, financial advisors would want their clients to buy, sell, or engage in investments to earn commissions without checking if it’s really what their clients need. Excessive financial activity by your advisor without a valid reason and without verifying your risk tolerance level may lead to churning issues.

4. Forgery

This is a common violation that advisors have been known to engage in. They carry out their illegal scheme forging your documents, even your signature, to enter into an investment deal or any financial activity without your consent. As soon as you see a forged document, take action immediately. You may need to trace and invalidate all transactions where the forged documents were used.

5. Outright Theft

This is when your advisor directly steals money from you. It usually happens to senior citizens who rely on simple bank transactions like withdrawing money. It would also be considered theft if your advisor asked you for an amount higher than what is required to pay insurance or purchased something. To avoid being a victim of theft, secure your digital assets even before hiring an advisor and find time to supervise the transactions you let them handle.

What To Do Before Filing A Complaint?

Filing a complaint against a financial advisor is a complex process and the governing body of FINRA does not always have your best interests at heart. It is advisable to seek legal advice before filing a complaint by yourself. To assist you in understanding the process of filing a complaint against your financial advisor, here’s what you can do:

1. Retrieve Important Information From Your Advisor

Before filing a complaint, the first thing that you need to do is to make sure to get all documents, data, emails, passwords, and make sure that your advisor no longer has access to your financial accounts.

2. Gather Evidence

You can’t just claim that your financial advisor is stealing money from you. You need concrete evidence to prove that there is negligence on their part. If you have sufficient evidence, it will ensure the success of your complaint. One of the reasons why cases are dismissed is due to lack of evidence.

3. Consult With A Fraud Lawyer

Find a fraud lawyer that will assist you all the way. Their primary task is to validate the evidence you have, especially if you are to recover losses. They’ll advise you about a suitable case to be filed based on the circumstantial evidence you have.

4. Communicate With Your Financial Advisor

Before anything else, it is important to speak with your advisor first. Give them the benefit of the doubt. It’s possible there’s a valid reason why they engage in such activity. If they are willing to make arrangements to settle their misses, you need to gauge their sincerity and capability to make things right. If they seem uncooperative, that’s the sign that you should opt to file a complaint.

5. Learn the Process Of Filing A Complaint To FINRA

If you have now decided to file a complaint, the first step is to fill up the FINRA investor complaint form. After they review the details you’ve sent, there will be arbitration and meditation to determine the possible settlement applicable to your situation. Filing a complaint requires a lot of time, so you need to be patient while it’s being sorted out.


Your financial advisor should help you with your stresses in handling your financial matters. If they can no longer manage their responsibilities, don’t hesitate to cut ties with them, especially if they are committing violations. Be familiar with the common fraudulent acts that financial advisors engage may in, so they can’t fool you. Ask assistance from your FINRA and from your lawyer to ensure that your rights are protected.

If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.

FINRA Complaint Advisor Article Image