The retirement years should be a time of peace and financial security, yet they’ve become prime hunting grounds for unethical stockbrokers and financial advisors. According to the FBI’s 2023 Elder Fraud Report, Americans aged 60 and older lost a staggering $3.4 billion to fraud schemes last year alone—with investment fraud being the costliest at over $1.2 billion.
While many retirees trust their stockbrokers and financial advisors to protect their life savings, some of these professionals violate that sacred trust. They engage in misconduct that can devastate retirement portfolios and destroy decades of careful planning.
The Hidden Danger of Broker Misconduct
Unlike obvious internet scams, stockbroker and advisor fraud often comes from professionals with legitimate licenses and impressive offices. These bad actors use their positions of trust to exploit vulnerable retirees through sophisticated schemes.
Recent enforcement actions reveal the scope of professional misconduct. In May 2025, the SEC filed charges against Bay Area real estate investor Kenneth Mattson for allegedly creating fake investment partnerships that defrauded elderly investors of more than $46 million.
“Stockbroker and financial advisor misconduct is particularly devastating because victims often don’t realize they’ve been defrauded until it’s too late,” notes Robert Wayne Pearce, one of the top investment fraud lawyers in the US. “With over 45 years representing investors in disputes with brokers and brokerage firms, I’ve seen how these professionals abuse their positions to enrich themselves at the expense of retirees who trusted them with their life savings.”
Common Forms of Stockbroker and Advisor Misconduct
Understanding how unethical brokers operate can help protect your retirement savings. These are the most common types of professional misconduct targeting retirees.
Churning: Brokers generate excessive trading in your account solely to increase their commissions. This unnecessary trading erodes your retirement savings through fees while providing no benefit to you.
Unsuitable Investments: Advisors recommend high-risk investments inappropriate for retirees who need stable income and capital preservation. They might push volatile stocks, complex derivatives, or speculative ventures to generate higher commissions.
Unauthorized Trading: Some brokers make trades without your permission or knowledge. They count on retirees not closely monitoring their monthly statements.
Misrepresentation and Omissions: Advisors may lie about investment risks or hide important information about fees and conflicts of interest. They paint rosy pictures while concealing potential downsides.
Selling Away: Brokers promote private investments not approved by their firms, often Ponzi schemes or worthless ventures. These “outside business activities” typically offer brokers huge commissions while leaving investors with nothing.
Elder Financial Exploitation: Some advisors specifically target elderly clients with diminished capacity. They may obtain powers of attorney or become trustees to gain control over retirement assets.
Red Flags of Broker Misconduct
Watch for these warning signs that your stockbroker or advisor may be engaging in misconduct.
Excessive Trading Activity: Your monthly statements show frequent buying and selling without clear strategy or benefit. Commission costs are eating into your returns.
Concentrated Positions: Your broker has put too much of your money in a single stock or sector. This violates basic diversification principles crucial for retirees.
Complex Products You Don’t Understand: Your advisor pushes complicated investments like structured products or private placements. If you can’t explain it, you shouldn’t own it.
Pressure to Borrow: Your broker encourages using margin loans or mortgaging your home to invest more. This dangerous leverage can amplify losses.
Missing Money or Statements: You notice unexplained withdrawals or stop receiving regular account statements. Your broker makes excuses when you ask questions.
Reluctance to Provide Information: Your advisor becomes defensive or evasive when you request details about fees, performance, or specific investments.
Protecting Yourself from Professional Misconduct
Take these concrete steps to safeguard your retirement savings from unethical brokers and advisors.
Verify Credentials: Check your broker’s background through FINRA’s BrokerCheck before investing. Look for complaints, regulatory actions, or criminal charges.
Understand Every Investment: Never invest in anything you don’t fully understand. Ask questions until you’re completely comfortable with the risks and costs.
Monitor Your Accounts: Review monthly statements carefully and question any activity you don’t recognize. Don’t assume your broker knows best.
Get Second Opinions: Before making major investment changes, consult an independent financial professional. A fresh perspective can reveal potential problems.
Document Everything: Keep records of all communications with your broker, including emails, notes from phone calls, and account documents. This evidence is crucial if disputes arise.
Trust Your Instincts: If something feels wrong, it probably is. Don’t let professional credentials override your gut feelings about suspicious behavior.
Taking Action Against Broker Misconduct
If you suspect your stockbroker or advisor has engaged in misconduct, act quickly. File complaints with FINRA, your state securities regulator, and the SEC.
Consider consulting an experienced securities attorney who can evaluate your case and pursue recovery through FINRA arbitration. Many investors have successfully recovered losses caused by broker misconduct.
The golden years of retirement should be protected by trustworthy financial professionals, not exploited by them. By staying vigilant and understanding the signs of broker misconduct, retirees can better protect their hard-earned savings from those who would abuse their positions of trust.
Your retirement security depends not just on making good investments, but on working with ethical professionals who put your interests first.
Dana Morano is the dedicated Editor-in-Chief of Press Posts, with a passion for responsible journalism and a commitment to transparent, unfiltered reporting. Hailing from Asheville, North Carolina, she combines her love for nature and community with a deep respect for accuracy and ethics in journalism.
