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Years ago, my grandfather sold an old apartment and opened an investment account with a financial advisor he knew from his neighbourhood.

The financial advisor works with a broker and my grandfather can see his money in the Pershing webpage, but I can't find any data about the financial advisor.

A Google search comes back with just a LinkedIn profile.

Is the Pershing account proof of safety?

Is my grandfather's money safe?

Pershing LLC is a subsidiary of The Bank of New York Mellon.

My grandfather is in Uruguay, as are the advisor and the brokerage firm.

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  • "I can't find any data about this advisor he has". That's worrisome. Is your grandfather's account balance growing? While down this year, it should have doubled in the past 10 years. That'll tell you something about this adviser. – RonJohn Oct 20 '19 at 2:46
  • Not at all. Avg 5% a year. Still, it could be it's just invested in short bonds I guess. I am not concerned about the approach at this moment, but if the money can be stolen in any way without his sign/consent. – Luis Oct 20 '19 at 2:58
  • I can see the funds invested and their price at the buy. Still.. Same concern. – Luis Oct 20 '19 at 3:06
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    I'm not sure we can really help you more than what you've already done. You need to express your concerns directly to your grandfather. (Though that's easier said than done.) – RonJohn Oct 20 '19 at 3:54
  • Thanks Ron. Now let's say he trust this man but still I convince him to do further research. What else could we do? – Luis Oct 20 '19 at 19:04
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Pershing is a respected custodian and there are no concerns about Pershing taking/misappropriating your grandfather's money.

However, the advisor and the broker could withdraw money from your grandfather's account if he signed paperwork authorizing them to do so. The only way to be certain is to review copies of the documents your GF signed when opening this account.

The most basic type of account is a non-discretionary account. This only allows the advisor/broker to place a buy or sell order for securities and only after getting your GF's permission. Only your GF can withdraw money from the account.

Limited Discretion is the next level; the main difference is that the advisor/broker can place buy/sell orders without getting your GF's permission. This is common. Only your GF can withdraw money from the account.

Full Discretion is very similar to being a Power of Attorney(POA); it's likely your GF would have signed a document providing limited POA authority to the advisor/broker. This gives them the ability to withdraw funds from the account. This would typically be done to purchase real estate or other non-tradable securities.

Pershing will require a written letter of instruction/authorization to send money to an address other than your GF's address of record, or your GF's bank. However, if your GF granted Full Discretion it is possible for an unethical person to send money to a 3rd party address or bank.

All advisors and brokers in the US are required to be registered and their disciplinary history can be found here: https://brokercheck.finra.org/

Check Uruguay's Securities Regulator for something similar - I assume they are required to be registered there as well but only know how US and EU securities markets work. I found the below site but as an english only reader I can't say with certainty how helpful this will be.

https://www.bcu.gub.uy/Ingles/Paginas/Securities-Intermediaries.aspx

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  • Of course, the grandfather could have just given this guy "he knew from his neighbourhood" his username and password. – RonJohn Oct 20 '19 at 20:14
  • true, but that would only allow him to send money to the address or bank of record on the account, not a third party address or bank. Risk is very limited – FrankRizzo Oct 20 '19 at 20:17
  • We don't know what documents the grandfather signed when handing over the money. Heck, the address of record might be the adviser's office. – RonJohn Oct 20 '19 at 20:24
  • Thanks Frank. The brokeage firm is listed there. – Luis Oct 20 '19 at 20:32
  • What if I contact this firm on my gf behalf? Should they be able to tell me my gf account historical movements if they had my gf consent? – Luis Oct 20 '19 at 20:34

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