As LPL Financial Expands Alternative Investment Platform, Exposure To Greater Risk of Loss Also Increases. Our Alternative Investment Loss Recovery Attorneys Represent Investors in FINRA Arbitration
Over the last several months, LPL Financial has been enhancing its ability to sell more alternative investments to customers. These are generally riskier and more illiquid offerings than traditional investments. Many alternative investments, including business development companies and non-traded real estate investment trusts, are unsuitable for retail investors. But, as Shepherd Smith Edwards and Kantas Senior Partner and Securities Attorney Sam Edwards said to InvestmentNews, “This is undoubtedly a way for LPL to join the party and start selling these investments to retail clients to increase LPL’s revenue as well as the risk to its customers.”
Not only that but alternative investments tend to charge higher fees. Most of them should be sold primarily to wealthier, more experienced investors who can better weather any accompanying risks.
LPL said that one of its main reasons for building its alternative investment capabilities is to better service its high-net-worth investors. The broker-dealer also stated that it was seeking to draw in more wirehouse financial advisors who, on average, generate over $1M in yearly fees and commissions.
It is important to note, however, that certain alternative investments can be too risky even for wealthy investors. This is why it is essential that your financial advisor conduct the proper due diligence to ensure suitability before marketing and recommending these investments to any customer.
Granted, there is a chance of making more money with alternative investments than with more traditional investments. However, the possibility of loss can also be greater.
A few examples of alternative investments:
- Exchange-traded funds
- Delaware statutory trusts
- Private placements
- Structured products
- Regulation D offerings
- Annuities
- Oil and gas investments
- Promissory notes
Why You Need To Work With Skilled Alternative Investment Loss Recovery Attorneys If You Sustained Losses
Alternative investments can be complex. It is one of the many reasons why you want to retain a seasoned securities law firm that knows how to represent inventors with these kinds of losses. Many of our clients at Shepherd Smith Edwards and Kantas (investorlawyers.com) have been the victims of alternative investment fraud or broker misconduct.
Because brokers can earn higher commissions from marketing and selling alternative investments—as opposed to more conservative, traditional investments—there are those that will disregard a customer’s best interests by promoting these assets.
With more than a century’s worth of combined experience in securities law and the securities industry, our Alternative Investment Loss Recovery Attorneys know how to identify when an investor has been the victim of unsuitable investment recommendations, concentration, misrepresentations and omissions, selling away, unauthorized trading, churning, negligence, and more.
Representing Investors Against LPL Financial And Its Brokers
Over the years, Shepherd Smith Edwards and Kantas Alternative Investment Loss Recovery Attorneys have represented investors who have suffered losses due to broker misconduct or negligence by an LPL Financial registered representative. LPL is an independent broker-dealer that has been the subject of investment loss recovery claims.
For example, its business model, which includes a commission structure for certain investment products, can make it easier for conflicts of interest to arise. Lax supervision has also been at issue, as has issues about fee transparency.
Even if your LPL financial advisor did not purposely seek to defraud you, they and the firm could still be held liable for your portfolio losses if broker negligence was a factor.
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