Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Stan Buell knows all about the financial and emotional devastation investors feel when they're victimized by an unscrupulous adviser. In the mid-1980s, he lost about $1-million to a broker who engaged in fraud and unauthorized trading.

Learning that the adviser had previously been disciplined three times only added to Mr. Buell's suffering. After doggedly pursuing his case and recouping a portion of his money, he made a vow.

"When I got through it - and it took me years to get through it - I said, 'Okay, I'm going to devote some of the rest of my life to helping other people.' Because it's devastating, absolutely devastating," he says.

Story continues below advertisement

Now, as president of the Markham, Ont.-based non-profit Small Investor Protection Association ( sipa.ca), the retired engineer is making good on his promise. His volunteer-based organization helps investors navigate the often intimidating legal and regulatory maze they face when trying to recover losses.

If you believe you've been treated unfairly by an adviser and don't know where to turn, this Investor Clinic is for you. Based on conversations with Mr. Buell and fellow investor advocate Ken Kivenko, we offer some tips on how to fight back.

ASK FOR HELP

Fighting the powerful investment industry alone is like stepping into the mixed martial arts ring with no training: You are going to get killed. That's why it's critical to get advice from someone who knows the ropes and can determine whether you have a case.

"The main thing we do is try to provide some guidance because most people don't know what's going on. They have a problem and it takes them a while to find out where to go," Mr. Buell says.

For an annual membership fee of $20, SIPA provides resources including tips on where and how to file a complaint and a list of lawyers recommended by other members. In the future, it hopes to offer brief initial legal assessments so investors can decide whether it's worthwhile to make a claim.

For those who have suffered large losses, he believes that hiring a good lawyer - typical cost: $300 to $600 an hour - is critical. Make sure it's a securities litigator with a track record of winning cases, and ask to see a decision in one of those cases, he says. "You don't want to go cheap on a lawyer. You need a lawyer who can fight the battle," he says.

Story continues below advertisement

PREPARE YOUR COMPLAINT

Gather all of the following documents, if you have them. If you don't, ask your adviser's firm to provide them: The initial letter of engagement, new account application form, Know Your Client (KYC) form, account statements, transaction slips, records of any meetings or correspondence with your adviser, your investment policy statement, and any other materials you feel are relevant.

Mr. Kivenko recommends creating a time line of significant events, including noteworthy trades, discussions and e-mails. This will help you construct a chronology to use in your complaint letter, which will make it easier for the investigator to assess the merits of your case.

"You have to file a complaint properly. If you word it incorrectly or leave out an important fact, you could be devastated," he says. For tips on preparing a complaint, see the "Investors Guide to Effective Complaints" on Mr. Kivenko's website at canadianfundwatch.com. Also check out the website's many other useful articles on investor protection.

CONTACT THE FIRM

Ask the firm about its complaints process and send your letter to the appropriate person, which may be the adviser, compliance officer or branch manager. In your letter, "be clear about what went wrong and when. State the outcome you expect - for example, an apology, getting your account corrected or getting your money back," the Ontario Securities Commission advises in its brochure "Getting help with your complaint" (available at osc.gov.on.ca).

Story continues below advertisement

Mr. Buell recommends following up every two weeks and keeping a paper trail of all e-mails, letters and faxes. The firm should deal with your complaint within 90 days, he says. If you aren't satisfied with the outcome, or feel that your complaint won't be resolved within 90 days, you have other options.

OMBUDSMAN

The Ombudsman for Banking Services and Investments (obsi.ca) provides a free service for resolving banking and investment disputes. OBSI can recommend restitution of up to $350,000. You must contact OBSI within six months of receiving the firm's final response to your complaint.

If you're not happy with OBSI's recommendation and you haven't yet hired a lawyer, now may be a good time (your provincial law society can help you find one). Be mindful of your province's limitation period, which is the time you have to take legal action. In most provinces, it is two years from the time you discovered, or should have discovered, your loss, Mr. Buell says.

ARBITRATION

Clients of firms that belong to the Investment Industry Regulatory Organization of Canada can request arbitration. But because compensation is limited to $100,000 and the decision is binding, arbitration is used infrequently, Mr. Kivenko says.

Story continues below advertisement

If you try all of the above and are still unsatisfied, you can take your adviser to court. The good news is that more than half of all cases are resolved before it gets to this point, Mr. Buell says. Most settlements are for somewhere between 50 per cent and 75 per cent of the amount claimed, he says.

HANG TOUGH

Some investors can't take the stress and abandon their claims before they are resolved. "Financial institutions rarely concede easily or promptly," Mr. Kivenko says. "Some may try to intimidate you by writing you a formal-looking letter summarily stating that you have no valid claim. ... It's part of the game. Expect a protracted, emotional and frustrating trip."

Which is all the more reason to reach out for the help that's available.

***

Writing an effective complaint letter

Story continues below advertisement

1. Keep it businesslike, courteous and professional. Avoid emotion and profanity.

2. Clearly state the problem, time lines, employee name, and specific reasons you believe you have a valid complaint.

3. State what restitution you want.

4. Set a deadline for a response.

5. Send a copy to the adviser's supervisor or branch manager.

Source: Canadianfundwatch.com

Story continues below advertisement



Learn more about investing from John Heinzl The 2010 Investor Education series for beginner investors:

  • Part 1: Want to invest? Learn to save first
  • Part 2: Mutual funds: A good place to start
  • Part 3: Why ETFs are booming
  • Part 4: Sleeping well with GICs
  • Part 5: Why buy and hold is (still) the best approach
  • Part 6: Death, yes. Taxes? Not necessarily.

The 2010 Investor Education series for advanced investors:

Gail Bebee's weekly mentoring for our investor education contest winner:





Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies