According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Lance Spencer (Spencer), previously associated with Fidelity Brokerage Services LLC, has at least one disclosable event. These events include one customer complaint, alleging that Spencer recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $1,500,000.00 on August 21, 2024.
I met [REDACTED] and [REDACTED] in 2012 as an Account Executive at Fidelity Investments in Chandler, AZ, and maintained a professional relationship with them until I left Fidelity in November 2020. When I became an independent advisor, I managed an options strategy for clients involving covered call writing and a deep-in-the-money short put income strategy. I did not initially discuss this strategy with the [REDACTED] until March 2022, when they inquired. After explaining the strategy and associated risks, they expressed enthusiasm and committed funds.\<char_lb_r>\, \<char_lb_r>\, [REDACTED] started with approximately $1M (7.4% of his assets with me) and [REDACTED] with $600K (8%). Both had comparable holdings in real estate and saw their portfolios as sufficiently diversified. Due to success in 2022, they increased their exposure, which grew to about 20% of their AUM with me by February 2024.\<char_lb_r>\, \<char_lb_r>\, In July 2023, my RIA updated our ADV to clarify options strategy language, including performance fees and the high-water mark. We met with each client using the strategy, including the [REDACTED], to review and sign the revised ADV. At the time, we had not experienced any monthly losses, which likely contributed to their confidence.\<char_lb_r>\, \<char_lb_r>\, [REDACTED] regularly asked about potential losses. I reminded him that while we experienced 10% losses on individual positions nearly every month, our overall results had remained positive. I emphasized our diversification, use of weekly expirations to limit risk, and the inherent risks of naked puts. We held monthly summary calls and consistently reminded them that losses were possible and even expected in some months.\<char_lb_r>\, \<char_lb_r>\, In March 2024, we experienced our first monthly loss due to two assigned positions. [REDACTED], [REDACTED], and [REDACTED] son-in-law, [REDACTED] (a participant since 2023), chose to continue in the strategy. We discussed a recovery plan extensively. By June, [REDACTED] account had recovered to the high-water mark, but [REDACTED] had not. In the final week of July, new losses occurred due to market volatility, particularly in tech/semiconductors, followed by a broader downturn on August 5th triggered by a Japanese rate hike.\<char_lb_r>\, \<char_lb_r>\, We met that evening, and the [REDACTED] insisted all positions be closed the next day, despite our proposal to trade out of some losses. On August 6th, [REDACTED] incurred a $1.6M loss, leaving him with an $834K gain since inception (9.1% annualized). [REDACTED] lost $610K, resulting in a $132K net loss. [REDACTED] lost $184K, netting a $74K total loss.\<char_lb_r>\, \<char_lb_r>\, They held the assigned stock until August 12, then directed us to sell. By week’s end, the market had rebounded. [REDACTED] remarked, ‘If we had not sold everything, we would have lost a lot less.’ I agreed that recovery could have reached about 70% of losses, as seen in other clients’ accounts, but reminded him the decision to sell was his on August 5th. [REDACTED] responded, ‘If you were a good advisor, you would have talked me out of selling everything. ‘\<char_lb_r>\, \<char_lb_r>\, On August 21st, [REDACTED] notified my RIA of his intent to sue, claiming:\<char_lb_r>\, \<char_lb_r>\, – He didn’t understand the strategy\<char_lb_r>\, – He was unaware of the loss potential\<char_lb_r>\, – He had expressed a desire to avoid stock market exposure\<char_lb_r>\, – As someone over 65, the strategy was unsuitable for him\<char_lb_r>\, \<char_lb_r>\, After extensive deliberation, I chose to settle rather than go to arbitration. My RIA agreed to cover $150K, equal to the fees received from the [REDACTED]. I was responsible for the remaining $1.35M. A settlement agreement was signed on October 9th, and funds were transferred to their attorney’s escrow account on October 20, 2024.
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