Did My Financial Advisor Make Sure that I Am Diversified?
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As reported in InvestmentNews, three Raymond James entities have agreed to pay over $15 million to resolve an investigation by the SEC. The settlement and SEC order focused on Raymond James’s actions in improperly charging certain clients advisory fees when the...read more
They say, “Don’t put all your eggs in one basket.” This is such an important tenet of investing, and a financial advisor who fails to diversify your investment portfolio might be committing rookie mistakes. You should always talk to your financial advisor when making new investments and discuss whether your investments are diversified. If they failed to talk to you about these kinds of things, and then put all your funds into one investment, you could be set-up for failure. Especially if the advisor had an undisclosed conflict of interest regarding your investments, you may have been the victim of unsuitable investing. Talk to a FINRA arbitration lawyer like those at Epperson & Greenidge today to discuss your options to file a claim against a negligent broker or financial advisor.
How Diversifying Your Investments Protects Your Money
Diversifying your investments gives you an investment advantage. Not only can you spread your chances of having a successful investment across multiple investments, but you also spread the risk. If one investment tanks, it can drag your entire portfolio with it if you have no other investments. Any financial advisor worth their salt will understand this investing fundamental, and they should advise you accordingly. This means discussing options to spread your money across multiple investments and using other safeguards to help minimize damage if your investments or stocks fail.
Rarely, financial advisors may recommend putting large funds into one particular investment, but this always carries risks. If your financial advisor fails to discuss the risks of pooling investments or transferring funds into one account, you should be suspicious. In some instances, a financial advisor may even advise you to do things like this for their own benefit. If an advisor discusses “sure-thing” investments or otherwise advocates putting a high volume of resources into a single investment, they may have a stake in that investment that they haven’t told you about.
If your investments take a strong downturn, and you lose money, the first person you usually want to blame is your broker or financial advisor. In most cases, your investments won’t be 100% successful, and you may lose money with natural market fluctuations. However, your financial advisor should make moves to help you mitigate your losses and reduce the impact of market downturns. Failing to do so may be evidence that your advisor pushed you into unsuitable investments.
Can You Sue Your Broker or Financial Advisor for Bad Investing Advice?
State and federal laws dictate what specific standards your broker or financial advisor must meet. On top of that, the Financial Industry Regulatory Authority – better known as “FINRA” – creates rules and regulations within the financial industry. While these laws may give you the opportunity to take your case to court if your advisor fails to uphold their duty, FINRA has its own resources for victims of bad financial advice, financial negligence, or breach of brokerage contracts.
FINRA allows victims of bad financial advising or bad brokerage to take their claims before FINRA arbitration. Most financial industry professionals get their licenses through FINRA and are held to strict standards under their rules. Many violations might not amount to illegal actions you can go to court for, but they are severe enough for FINRA rules to justify sanctions against the advisor and compensation for your losses.
Many investments are also insured so that a bad broker should not get in the way of you recovering damages. If your broker walks away with your money or intentionally causes you to lose money on your investments, the insurance on your investments may help you recoup your losses.
Additionally, FINRA arbitration can force the negligent broker or financial advisor to pay you damages for your losses. If they mishandled your funds or otherwise lost your money when they should have communicated better or worked harder to protect your investments, they may be personally on the hook for damages.
Taking your case through FINRA arbitration often produces results quicker than going to court – and at a lower cost. Filing a lawsuit and fighting it in court often costs thousands or hundreds of thousands of dollars, which may ultimately be a higher cost than the investments you lost. Taking your case through arbitration is often much cheaper, and requires less wait time to get your case heard than it would to go to court.
FINRA Arbitration Lawyers for Victims of Bad Investments
If you lost money on a bad investment and your broker or financial advisor never helped you diversify your investments or protect your finances, talk to a FINRA claims lawyer about your case. You may be able to file a claim for FINRA arbitration to recover your losses and seek damages from the negligent broker or financial advisor. Talk to the attorneys at Epperson & Greenidge today at (877) 445-9261 for a free consultation on your FINRA case.