HITESH M PATEL is currently employed as a Broker and/or Investment Adviser at SUMMIT BROKERAGE SERVICES, INC. located at 66 MACCULLOCH AVE, MORRISTOWN, NJ, 07960.
HITESH M PATEL has worked at SUMMIT BROKERAGE SERVICES, INC. since July 31, 2009
Disclosure History
HITESH M PATEL has 1 Disclosure Event(s).
Date: February 12, 2010 Category: Customer Dispute Allegations: CLIENT ALLEGES HE WAS NOT NOTIFIED OF REALIZING LOSSES WHILE SWITCHING MONEY MANAGERS. (01/01/2009)***ARBITRATION ALLEGATIONS: CLAIMANT ALLEGES FA RECOMMENDED UNSUITABLE INVESTMENTS. Damage Amount Requested: $150,000.00 Settlement Amount: $4,900.00 Broker Comment: CLIENT HAD BEEN A CLIENT SINCE 2002. IN 2006 I RECOMMENDED THAT HE NOW HIRE PROFESSIONAL MONEY MANAGERS TO MANAGE HIS ASSETS. I EXPLAINED THE BENEFITS OF TAX EFFICIENCY, MORE TRANSPARENCY, FLEXIBILITY AND BETTER PERFORMANCE WITH THE PORTFOLIO MANAGERS WACHOVIA/WELLS FARGO HAD CONTRACTED WITH IN THEIR DIVERSIFIED MANAGERS ALLOCATION (DMA) ACCOUNT. I REVIEWED ALL THE MANAGERS WHICH WERE ON THE RECOMMENDED LIST OF WACHOVIA/WELLS FARGO AND RECOMMENDED THREE MANAGERS TO THE CLIENT. I SELECTED LORD ABBETT'S VALUE PORTFOLIO, CALAMOS' GROWTH PORTFOLIO AND PACIFIC INCOME ADVISORS FOR THE FIXED INCOME PORTFOLIO. I EXPLAINED TO THE CLIENT THAT EACH MANAGER WAS CONSISTENTLY OUTPERFORMING THEIR RESPECTIVE BENCHMARKS AND THEY COMPLEMENTED EACH OTHER WHEN IT CAME TO RISK AND RETURN. I ALSO EXPLAINED THAT THROUGH THIS PLATFORM WE CAN READILY CHANGE MANAGERS IN AN EFFECTIVE MANNER IF ANYTHING IN HIS LIFE CHANGED OR THE RECOMMENDED MANAGERS STARTED TO UNDERPERFORM SINCE PAST PERFORMANCE IS NOT A SURE INDICATOR OF FUTURE RESULTS. TAKING INTO CONSIDERATION RISK TOLERANCE, HIS AGE, (45 AT THE TIME) AND TIME TO RETIREMENT, I RECOMMENDED 70% IN EQUITIES AND 30% IN FIXED INCOME. I SENT HIM ALL THE APPROPRIATE DOCUMENTS (PROFILE, AND CLIENT AGREEMENTS) FOR HIS SIGNATURES WHICH HE SIGNED AND RETURNED. WE IMPLEMENTED THE NEW STRATEGY AND THE MANAGERS PERFORMED WELL SO HE WAS PLEASED. IN 2008 THE WORLD MARKETS WENT INTO A SEVERE BEAR MARKET AND ALL INVESTMENTS STARTED TO LOSE VALUE INCLUDING FIXED INCOME. THE MANAGERS THAT WERE RECOMMENDED STARTED TO UNDERPERFORM THEIR BENCHMARKS IN THE SECOND HALF OF 2008 AS THE RECESSION AND THE BEAR MARKET ACCELERATED. IT WAS AT THIS TIME IN THE 4TH QUARTER THAT I DECIDED TO RECOMMEND A CHANGE IN MANAGERS TO REDUCE THE RISK IN PORTFOLIO. AFTER REVIEWING ALL THE MANAGERS ON THE WACHOVIA/WELLS FARGO RECOMMENDED LIST I CONCLUDED THAT ROOSEVELT INVESTMENTS WOULD BE AN APPROPRIATE CHANGE. I SENT HIM ALL THE INFORMATION ON THE MANAGER AND EXPLAINED IN DETAIL THE PROCESS IN WHICH THE MANAGER HEDGES AGAINST DOWNSIDE RISK BY INVESTING 10-15% OF THE PORTFOLIO WITH THE USE OF INDEX ETFS WHICH GO UP IF THE MARKET GOES DOWN. I EXPLAINED THAT WE WOULD BE REPLACING LORD ABBETT AND CALAMOS INVESTMENTS WITH ROOSEVELT INVESTMENTS AS THE SOLE EQUITY MANAGER AS ROOSEVELT INVESTED IN BOTH GROWTH AND VALUE AND HAD BETTER RESULTS DURING RISING MARKETS AND LESS LOSSES DURING FALLING MARKETS DUE TO THEIR EFFECTIVE STRATEGY. THE CLIENT AGREED TO THE CHANGES. I SENT HIM ALL THE APPROPRIATE PAPERWORK FOR THE CHANGES IN THE FIRST QUARTER OF 2009 AND HE PROMPTLY RETURNED THE SIGNED DOCUMENTS SO THAT I MAY IMPLEMENT THE CHANGES. AS THE CHANGES WERE TAKING PLACE HE NOTICED THE SELLING WHICH WAS TAKING PLACE FROM CALAMOS AND LORD ABBETT AND THE BUYING TAKING PLACE FROM ROOSEVELT. HE CONTACTED ME AS SOON AS THE TRANSACTIONS STARTED TO TAKE PLACE AS HE REGULARLY VIEWED HIS ACCOUNT ONLINE. I EXPLAINED TO HIM THAT THE UNREALIZED LOSSES WOULD BECOME REALIZED AS THE TWO MANAGERS WERE BEING REPLACED AND HE WOULD HAVE NEW STOCK POSITIONS FROM ROOSEVELT. I FURTHER EXPLAINED THAT OVER THE COURSE OF A FEW YEARS WHEN THE MARKET RECOVERED HE WOULD HAVE LOW COST BASIS ON THE STOCKS ROOSEVELT WAS PURCHASING AND THAT THE GAINS AND LOSSES WOULD OFFSET EACH OTHER OVER TIME. HE STATED TO ME THAT HE UNDERSTOOD AND THAT HE COMPLETELY TRUSTED MY ADVICE AND JUDGMENT AND TO PROCEED WITH THE CHANGES. IN THE SUBSEQUENT MONTHS OF FEBRUARY AND MARCH THE MARKETS SOLD OFF FURTHER AND ROOSEVELT DID PERFORM BETTER THEN CALAMOS AND LORD ABBETT. SINCE THE TIME OF THE CHANGES THE MARKET HAS RECOVERED SO HE SHOULD NOW HAVE THE UNREALIZED GAINS IN HIS ACCOUNT WHICH I HAD EXPLAINED. ALL THE RECOMMENDATIONS WERE SUITABLE AND I ALWAYS ACTED IN HIS BEST INTEREST.
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