The following is my answer to a Quora question: “I moved my retirement 401K fund to a company called Security benefit. My balance was $52,000 in 2014, then $42,000 at the end of 2016, and still $42,000 at the end of 2018. Did they mismanage my money? Do I have any recourse?”
It is very difficult to state whether there was mismanagement when we have no details on your fund allocation, the terms of placement, and how their compensation is calculated. As such, I will not speculate. If you can prove negligence and mismanagement, then you may consider legal action. What I can say is this: in a period where all asset classes experienced tremendous increase in value, and the market grew at a significant rate, it is surprising that you made a 20% loss on your principal over a period of almost five years. What I find more surprising is that you did nothing immediately.
When a client makes a loss in a period of growth, either the financial consultant has a meeting with you to reallocate the weightage of your portfolio, or the client raises a ruckus, and there is service recovery. However, considering the current economic climate, with a projected global slowdown, and the small principal, I do not see how you can recover your losses in a decent period of time. I suggest you look for a competent financial consultant in your area, and see if you can salvage some of this, by mitigating your paper losses.
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