Geller Law
When I review trade confirmations, I am reminded of a magician. With a mere slight of hand, the magician distracts their audience and then "Walla" - the transaction is completed. What your advisor puts on the trade slips (trade confirmations) is important. No investor that I have met understands what the terms "non-solicited" and "solicited" mean, let alone the significance of these terms to their rights.
The trade slip has information completed by the advisor to effect a trade through the dealer. The trade slip has standard information like a date, and a stock's name. It also has the dollar amount of the trade and the number of shares bought/sold. Many investors first learn of a trade in their account because they receive a trade confirmation. If you are an investor that learned of a trade when it first showed up in your account, then unless you have a "managed account", there is something terribly wrong with your advisor.
If you didn't give instructions in advance of the trade, then the trade is called by confusing terms. Properly for most accounts, the investor in advance of each trade must be advised of the risk of the trade, the risk of the trade to their portfolio, the specific share being traded (for example not Enbridge but Enbridge Dividend Series B), the amount that is being traded, the number of shares, and the timing of the trade.
Technically the trade is called "discretionary". The trade confirmations don't show whether the trade was discretionary (without your explicit and complete instructions) or whether it was non-discretionary (with your explicit and complete instructions in advance of the trade). Most advisors are not licensed and most accounts do not permit discretionary trading. So, this is a potential red flag. Take care!
The slight of hand is that the trade slips make a bald statement about whether the trade was "solicited" or "non-solicited". This is a different concept. It means did the advisor make the recommendation for the trade (solicited) or did the investor (non-solicited).
A common finesse used by rogue and negligent advisors is to misrepresent trades recommended by the advisor as the idea of the investor. This is most common among the those advisors with low (no) standards. To avoid scrutiny and responsibility advisors commonly misdirect that trades are your idea (non-solicited).
The concept is that the investor is to fault for non-solicited trades. Strictly speaking, there is more to the analysis, but dealers when trying to avoid responsiblity conflate the nuances in an effort to shift blame to the investor.
Dealers often take this box as checked by the rogue and negligent advisor as gospel. Unquestioning so-called plausible deniability for the dealer. Dealers turn a blind eye to these same holdings showing up at the same time in many of the advisor's accounts as the magic trick was reality and all those investors magically came up with the same idea at the same time.
Regulators should be sweeping dealers to look for this systemic abuse. If there is this abuse, then what else is misdirection and magical untruths.
As investors, take heed. If you see this misdirection in your accounts, then how can you trust the advisor and the dealer? There is nothing innocent about these types of misdirection. Furthermore, it is a sign of rot. Rot in your advisor, your dealer and the regulatory oversight. Take care!
