Complaint Review: Stifel Nicolaus & Company Inc - Melbourne Florida

This is an update to my original report published February 14, 2010.

While I am still angry about the losses I incurred in my accounts managed by Stifel Nicolaus brokers, I do understand somewhat that the portion of the losses related to the Regions / Morgan Keegan (RMK) Funds may have been due to false information provided by RMK and presumed to be accurate when reviewd by Stifel Nicolaus Brokers.  I have known Jim Potter (Stifel Nicolaus Financial Representative) for nearly 20 years and believe individually he is overall a person of high integrity and is trustworthy. 

The other brokers, who were in Melbourne, FL office and were on the so called management team responsible for my accounts, are gone. My issue is not so much with Jim Potter but with Stifel Nicolaus for the way they treated me when I asked for help in recovering some of the losses that occured because of the investments in the RMK funds.  They (Stifel Nicolaus) would not get involved in any recovery effort even though they made all the decisions to purchase the RMK Funds. 

I am told that Stifel Nicolaus made decisions to purchase the RMK Funds based on infomration they beleived to be accurate but was later determined to be false.  If that is the case, then why didn't Stifel Nicolaus bring some action on behalf of their clients to recover the losses or at least assist their clieints with recovery?  Stifel Nicolaus continued to purchase more of these RMK Fund shares as the mutual fund value was going down and the news was all bad. Stifel Nicolaus gladly took the managmeent fees for several years but would not do anything to help me recover the $50,000 in losses in the RMK Funds.

I was quite upset with the losses (aproximately $250,000)  I incurred in my managed accounts. I still believe when you pay professionals a fee for professional level managment you have a right to expect a better outcome than the general averages.  If the performance of the account is flat or negative, then the brokers should receive a reduced fee.  Since the management fees are generally based on the account value, if the account never increases in value and performance is flat, the broker still collects the full management fee. 

It is like receiving pay for doing nothing.   It seems to me there is no real performance accountability in the financial management industry.  It is all very discouraging.  Even complaints filed with the Securities and Exchange Commission (SEC) are typically investigated by the the companies own Compliance Officer and the results are routinly accepted by the SEC.  How can that be objective?

I think individual small investors today have to be very cautious.  Individual stocks or even mutual funds which have been good solid investments for years can be manipulated by big business and leave the small investor holding the losses.  It is all very discouaging.  Our government has done just as poor a job of regulating the investment industry as it has done with the mortgage industry.   

I have worked with Jim Potter for over two years and have sent many clients and family to Jim and Stifel Nicolaus for investment advice. Jim has exceeded my expectations and has safeguarded the assets of my clients. He is professional and knowledgeable and the epidemy of honesty and integrity. The person who wrote this complaint is being very unfair to Jim Potter and Stifel Nicolaus.

Please complete your own research before you accept this authors opinion. After completing a full investigation in response to this investors complaint, FINRA (regulatory body) concluded there was no wrong doing or misrepresentation. You can access FINRAs report from the investigation on page 10 from the link below:

http://brokercheck.finra.org/Support/ReportViewer.aspx