From Our Lexington, Kentucky Overconcentration Lawyers, We Represent Investors Whose Financial Advisors Excessively Concentrated Their Accounts
For more than 30 years, Shepherd Smith Edwards and Kantas Kentucky Overconcentration Lawyers (investorlawyers.com) have represented Kentucky investors who have sustained losses in their investment accounts because of overconcentration. This is a serious problem that occurs all too often and may have been avoided were it not for financial advisor misconduct or negligence. Contact our Lexington excessive concentration law firm to schedule your free, initial case assessment.
Overconcentration Can Lead To Serious Losses For Kentucky Investors
Excessive concentration may occur when a broker or investment adviser invests too much of a customer’s assets in a single security, investment type, asset group, or industry sector to the point that it exposes the investor to an inappropriate level of risk.
While overconcentration can be a useful strategy, especially if the investor is a sophisticated one, accredited and high-net-worth investors can be vulnerable to serious losses, too, if anything goes awry. Excessive concentration is generally considered an unsuitable investment strategy for many retail investors, conservative retirees, and inexperienced investors.
The Financial Industry Regulatory Authority (FINRA) stated that while having a diversified portfolio is a basic strategy for avoiding concentration risk, it sometimes isn’t enough. This is why it is still important for your broker or investment adviser to manage said risk.
Several of the ways in which overconcentration can happen:
Intentional concentration: This involves the deliberate choice to invest a lot of the investor’s money in a particular asset or asset class.
Concentration caused by asset performance: A certain investment does well in comparison to the rest of the assets in an investor’s portfolio. As a result, holdings in this particular stock now consist of a larger percentage of their portfolio.
Company stock concentration: When employees concentrate their retirement savings in an employer’s stock.
Concentration involving correlated assets: The investments are different but they may be within the same industry, security type, or geographic area.
Illiquid investment concentration: The investor is invested in too many illiquid investments, such as private placements, Delaware Statutory Trusts (DSTs), and non-traded real estate investment trusts) (non-traded REITS), and others.
Too many investments are already exposed to high-concentration risks by their very nature.
Inappropriate excessive concentration can happen because of poor financial advisor mismanagement of an investor’s portfolio, broker error, negligence, disregarding an investor’s request for low-to-no-risk investments only, failure to diversify, best interest violations, the desire to make higher commissions by concentrating a customer’s assets in illiquid investments, or investment fraud.
It can be hard to know when you have been the victim of overconcentration. This is why you want to work with trusted Kentucky concentration attorneys that can how to identify when this is happening and whether you should sue your broker-dealer or investment adviser for damages.
Fighting For Kentucky Investors Against US Broker-Dealers and Investment Advisers
Our Kentucky Overconcentration Lawyers have more than a century’s worth of collective experience in securities law and the securities industry. We have represented thousands of investors in more than 1000 matters in arbitration, negotiation, litigation, and mediation.
Many of our clients have sustained unnecessary losses that could have been avoided. Whether you are a retail investor, an accredited investor, a senior retiree, a high-net-worth investor, an ultra-high-net-worth investor, or an institutional investor, know that should we decide to work together, you will receive experienced securities representation and personalized attention.
More than 90% of our clients have received full or partial financial recovery. That equates to thousands of investors collectively recouping many millions of dollars through our skilled efforts and dedication.
Contact Us Today:
Your first step is to speak with one of our Lexington overconcentration attorneys so that we can help you explore your legal options. In Jefferson County, Kentucky County, Fayette County, Boone County, and the rest of the Bluegrass State, call (859) 810-0266 or (800) 259-9010.
Our Kentucky Overconcentration Lawyers:
216 E Reynolds Rd #C
Lexington, KY 40517