Planner won't return calls?
There's no shortage of unethical financial advisers out there. Here's what to do if yours is one of them.
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NEW YORK (Money) -- Question: I'm a 57-year-old dummy that had a nice nest egg of $805,000. My brokerage firm assigned a certified financial planner (CFP) to me, who made some costly mistakes, but I stayed with him. This CFP left and the replacement adviser told me the CFP had done some unethical things. He then put me into other investments that went down and have penalties. Now, no one will return my calls. Does this sound like unethical behavior? What should I do?
The Mole's Answer: Though I think this is highly unethical behavior, I'm sad to say it is also incredibly common. And it's not limited to the big brokerage houses either. This behavior is just as likely to be found with "independent" financial planners, including CFPs.
Case in point: one independent CFP I know sold a client a product with over 5% annual fees and made a bundle doing so. What did the CFP do when the huge fees stopped flowing in? He instructed his client not to contact him anymore.
It sounds like something similar is going on with you. Because you mention penalties to change your investments, your adviser probably sold you commission-based products and is well on the way to building his nest egg. Unfortunately, this is not so good for your nest egg.
With that said, my first piece of advice to you is to learn from your mistakes. You mentioned, you stayed with the firm after they made some costly mistakes. I think you were way too kind in giving them a chance to make it right for you. Especially since, from what you're telling me, they only used the chance as another opportunity to take more money from you. Don't do this again!
If you want to draw their attention and get them to address the matter, here's how to do it:
Step one: document, document, document
Nearly every financial firm stacks the odds against the consumer. They will tell you things over the phone or in person, but are very reluctant to put it in writing. And those telephone conversations that are being recorded are doing so to protect the firm. You don't actually have a right to get those recordings. This creates a very unlevel playing field.
So to level that playing field, write everything down and send an email to the parties involved that reiterates what was said. If it's a telephone call, record the call, making sure that you are complying with all appropriate laws and letting them know you are also recording them. Naturally, I've found that some will refuse any conversation if you are also recording the call, which should tell you something right there. You mention that the second adviser you dealt with told you that your prior CFP did some unethical things. Write down all of the facts.
Step two: make some noise
It sounds like your adviser isn't calling you back because it's not to his benefit to do so. That problem is easily solved. Send a letter or email to the CEO of the firm. Note on the letter that you are copying the SEC, FINRA, and the State Division of Securities. Your correspondence may not be seen by the CEO, but will at least get to the firm's compliance department.
Make sure this written correspondence includes all of the facts you've documented in step one. Try to keep the letter as professional as possible. Let the facts speak for themselves and keep opinions and emotions to a minimum.
There have even been circumstances where I've taken it one step further and copied board members of organization, especially the chair of the audit committee. I've noted to the board members that there appears to be a systematic lapse in management controls and there is a need for their involvement as part of their fiduciary responsibility.
Step three: complain
If none of these work, it's time to file official complaints with regulators. Online forms are available at the SEC, FINRA, and possibly at your state's insurance regulator. Also, since at least one of your advisers is a CFP, you can file a complaint with the CFP Board of Standards.
I must confess that I can't say these complaints will likely result in getting favorable resolutions, but they do at least raise the level of visibility with the firm and give them the incentive to get this matter to go away. You also can feel good that you are helping others.
There's a possible fourth step which is hiring an attorney. Just know there are challenges involved if you pursue litigation. It's not an easy path to go down, so you need to take that into account when deciding whether you want to sue your adviser.
My advice
Do the work ahead of time to avoid this situation. Ask your adviser some tough questions before you hire him. Know when it's time to dump your adviser. Finally, consider going it alone or at least minimizing fees and conflicts.
The Mole is a certified financial planner and certified public accountant who - in the interest of fairness - thinks you should know what goes on behind the scenes in financial planning. Want to make contact? E-mail him at themole@moneymail.com. 
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