Recourse with financial adviser?

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mmmmaris

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What recourse, if any, do I have with my financial adviser if invested funds were lost?

My spouse and I signed a contract over the summer with a contractor to renovate our home. The funds to pay for these renovations were invested with a big name financial services firm.

In July, we sent a note to our financial adviser 1) advising how much we would need from our account and the dates on which we would need these funds through the end of the year and 2) asking if any changes should be made to how these funds are invested to ensure that they'd be available. We did not receive a response from the financial adviser and didn't pursue further. Knowing that we were going to need these funds, they were place in conservative bond funds. While the money was invested in bond funds, the funds lost value. At this point, there isn't enough of the investment left to pay for the renovations.

As a client of a financial services, I believe that my note defined my investment needs and timeline. I wasn't asking him to make money, but to safeguard money.

Did the financial services adviser have an obligation to act? What recourse do I have in this situation?

Appreciate your advice.
 
If you had directed the adviser to liquidate your investments and keep the balance in cash or money market funds, then the adviser might be liable for failing to follow your instructions. If you only gave general information and a time line, then you were giving the adviser discretionary authority as to how to best achieve your goals.

The adviser is not a guarantor. If a reasonable person would have felt that bonds were a reasonable place to park the funds until they were needed, then the adviser did not act improperly, even though the facts proved him wrong.

You also need to look closely at your account agreement to see what it provides.

There is no black and white rule, but unless there are more favorable facts than you have listed, I believe that you will find you have no recourse against the financial adviser on the facts you have outlined.
 
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