by John Darer CLU ChFC MSSC RSP CLTC
TD Ameritrade steered a disabled couple looking for a managed account to chat rooms where they lost about half a million dollars, according to the clients’ FINRA arbitration filing and a report in Financial Planning magazine. Kevin and Natalie Flynn accused TD Ameritrade of violating FINRA’s “know your customer” rules, as well as unsuitable investments and a failure to supervise — two of the most frequent client claims. Neither of the Flynns has been able to work for years, and Kevin Flynn visited a Manchester, New Hampshire, branch of TD Ameritrade in June 2010 looking to invest their disability settlements, according to their statement of claim. Kevin Flynn struggled daily attempting to copy the trades executed by the leaders of the chat rooms, he says.
“We were looking for somebody to manage it, and the rep told us about these chat rooms where you just do what they do,” says Kevin Flynn, 60. “It was very fast, the way that they traded.”
In my opinion referring a settlement recipient to a chat room is not financial planning or settlement planning. It comes under the category of "Financial WTF". It is clearly a cookie cutter approach to gather assets using a digital cookie cutter, no more appropriate than executing a six pack of beer stock recommendation from Uncle Vinnie at Shmuck family picnic.
The Flynns could have used a settlement planner so that they could have made a better, more informed decision. Read more about Settlement planning