BTG Lawsuit Claims Retiree’s Savings Wiped Out Due to Arbor Financial Services’ Portfolio Mismanagement
When somebody has worked hard and saved money during their career, they often rely on an investment strategy to help provide a reliable income stream in retirement. To that end, a retiree may seek out an investment advisor to, as the saying goes in the wealth management business, “make their money work” for them.
Entrusting your assets to an advisor is not a decision to take lightly, and the law reflects this. As fiduciaries, advisors have a legal duty to place their clients’ interests above their own. Advisors that fail to act in an investor’s best interests can be held accountable for investment losses that result from their mismanagement, such as making unsuitable investment recommendations, misleading the client, and not following the client’s instructions.
These issues are raised in a recent lawsuit filed by the Business Trial Group’s securities lawyers on behalf of a retiree who lost nearly $1 million at the hands of an investment advisor. BTG is pursuing damages for the client—as we do for every client—on a contingency-fee basis.
Client Hires Jeffrey Small, Arbor Financial Services of Florida
Our client in this case is the quintessential rags-to-riches story. The oldest of seven siblings, he grew up in a military family, paid for college by working two jobs, and upon graduation went to work for the family business. He eventually became president of the company and retired in 2018. Through diligent savings, he accumulated a multi-million dollar retirement portfolio.
After moving to Florida with his wife, our client entrusted his life savings to Jeffrey Small of Arbor Financial Services of Florida, Inc. Arbor is a partner and agent of Sound Income Strategies LLC (SIS), an investment advisory firm in Broward County, Florida.
Arbor and SIS cater to investors who are retired or nearing retirement. They market themselves as a lower-risk investment approach to protect retirement savings from market uncertainty and losses. For example, SIS touts itself as “help[ing] you build a retirement plan that delivers dependable income, growth potential, and, most importantly, defense against damaging losses.” Arbor’s website states that they take a “conservative approach” to “protect your retirement savings from economic uncertainties [and] reduce, and possibly eliminate, your exposure to stock market risk.”
This approach appealed to our client, a conservative investor with little knowledge of investing or personal finance. He wanted safe investments in retirement that provided income and principal stability. Above all else, he told Jeffrey Small that he did not want his retirement funds exposed to the volatility of the stock market. The Complaint states that Small promised that he could safely deliver 5 – 7% annual returns, without market exposure, which led our client to hire Small to manage his retirement accounts.
Improper Investments Lead to Huge Losses
Our client was impressed with Small and fully believed in what he promised. He ended up transferring nearly $5 million to accounts managed by Small, including his 401k and life insurance policies. But, the BTG’s lawsuit details, rather than invest the money in a suitable manner for a risk-averse retiree, the money was invested in a portfolio over-concentrated in equities and high-risk income products. Within less than a year our client saw more than $1 million disappear from his portfolio and watched years of hard work unravel before his eyes.
According to the lawsuit filed by BTG attorney Evan Frederick, Small not only misrepresented the services he was providing, but he blatantly lied on several occasions. Most egregious of all, the lawsuit claims, Small invested the majority of our client’s $5 million portfolio in equities—exactly the opposite of what the client requested and what Small promised. The Complaint also alleges that Small failed to follow clear instructions from the client to immediately liquidate these equity investments when the markets crashed in March 2020 due to COVID-19.
The defendant investment advisors “owed fiduciary duties of loyalty, care, and good faith in managing the accounts and providing suitable investment advice,” the lawsuit states. Given the client’s age, conservative investor profile, and instructions to avoid the stock market, “he never should have been invested in a portfolio that could suffer such a degree of volatility and loss.”
Contingency-Fee Investment Loss Attorneys
Whether you hire a broker or investment advisor, these professionals are legally bound by professional conduct standards. Brokers must follow the suitability standard established by the Financial Industry Regulatory Authority (FINRA), while advisors owe clients a fiduciary duty under the Investment Act of 1940. These fiduciary duties include making full and fair disclosures of all material facts affecting an investment; disclosing all potential conflicts of interest; making suitable investment recommendations based on the client’s profile; not misleading the client in any way; and acting in the client’s best interest rather than in the adviser’s best interest.
The Business Trial Group has seen many hard-working people lose their investments and their financial security as a result of investment misconduct. That is why we combine experienced and skilled securities attorneys with a contingency-fee business model. Our goal is to not only be the best securities litigation attorneys in Florida, but to make the highest quality representation affordable.
No matter the amount of your investment losses or how long it takes to resolve your case, you pay no upfront legal fees, and no fees at all, unless we recover your money. If you lost money because of investment fraud or negligence on the part of an advisor or broker, contact the Business Trial Group for a free case review.