Oregon Overconcentration Law Firm

Portland, Oregon Overconcentration Law Firm. Our Broker-Dealer Attorneys Represent Oregon Investors Who Suffered Losses Because of a Failure To Diversify 

From our Portland, OR securities law offices, the Shepherd Smith Edwards and Kantas Oregon Overconcentration Law Firm (investorlawyers.com) represent investors in Oregon who sustained portfolio losses because their stockbroker excessively concentrated their accounts. This is also known as overconcentration and it can lead to serious losses.

What Is Overconcentration As It Relates To Broker Misconduct?

When an investor places too much money into one investment, this can create a concentration risk. It is better that a portfolio is diversified with different kinds of investments, asset classes, or financial products from different sectors.

Overconcentration is what happens when a financial advisor highly concentrates a customer in one security, asset group, or industry sector. This is a high-risk approach, especially if an investment fails or proves fraudulent.

Proper diversification can help manage the risk of loss should any occur—unlike when all of an investor’s “eggs” have been placed in “one basket,” as the saying goes. In order to do this, financial advisors must conduct the proper due diligence to ensure they have taken into account a customer’s goals, risk tolerance level, liquidity needs, and other factors. In many cases, excessive concentration by a broker not only may be a violation of the Financial Industry Regulatory Authority’s (FINRA’s) rules, but also it can be grounds for suing the financial advisor and their brokerage firm should serious investor losses result.

Unfortunately, there are many brokers who will unsuitably overconcentrate a customer’s portfolio with some “hot” or high-risk alternative investment product or industry. This is often because an investment, such as a private placement or non-traded real estate investment, or investments involving the oil and gas industry, will likely earn them higher commissions and fees than safer, low-risk traditional investments.

Overconcentration is one of the most common reasons named in broker misconduct claims. Often, the claimants are retail investors conservative retirees, and seniors who never could have tolerated such risk to begin with. This doesn’t mean that high-net-worth investors, institutional investors, and other accredited investors don’t fall victim to failure to diversify-related losses. (However, we would also like to note that concentration is sometimes a strategy purposely used by brokers and done with the consent of certain sophisticated investors who understand the risks.)

Identifying when overconcentration is an issue in an investor’s account is not always easy, which is one of the many reasons why you need skilled Portland, OR concentration attorneys by your side.

Some Examples of Ways In Which Overconcentration May Occur in an Oregon Investor’s Portfolio:

• Portfolio mismanagement by a broker, whether through error or negligence. This can include failing to regularly review an investor’s account for changes that might need to be made to maintain proper diversification.
• As we mentioned earlier, a financial advisor prioritizes the high commissions they can earn over an investor’s best interests. This can result in unsuitable investment recommendations, such as excessive concentration.
• Broker fraud.
• Correlated investments are likely to move up or down in the same direction when reacting to market events.

Fighting For Oregon Investors for Over 30 Years

Shepherd Smith Edwards and Kantas have been representing investors all over The Beaver State for decades. Our team of seasoned Portland overconcentration lawyers, legal assistants, consultants, and others have over a century’s worth of collective experience in securities law and the securities industry. Many of us are financial advisors who left the brokerage industry because we didn’t like the many bad behaviors we witnessed that were causing investors financial harm. That is why we are fully dedicated to fighting for investors and protecting their legal rights.

Our Oregon failure to diversify attorneys has represented thousands of clients in more than 1000 matters in arbitration, mediation, negotiation, and litigation. More than 90% of investors have received full or partial financial recovery through our skilled efforts and committed dedication.

Contact Our Portland, Oregon Overconcentration Law Firm

Call (971) 285-3075 or (800) 259-9010

Our Oregon Overconcentration Law Firm Office: 

621 SW Morrison St #1050-B
Portland, OR 97205