Overconcentration Attorneys

Did You Suffer Portfolio Losses Because Of A Failure To Diversify?

Our Skilled Overconcentration Attorneys Help Investors Pursue Financial Recovery

Financial advisors should know the importance of properly allocating an investor’s funds among different kinds of financial products, asset classes, or market sectors. Seeing as all investments come with some risk, proper diversification increases protection from serious losses because should one investment plunge in value, the hope is that the returns generated by the other financial products in the portfolio can help offset the overall impact on an investor’s money.  In other words, to use a popular phrase, “Don’t put all of your eggs in one basket.”

How each investor’s assets are “properly” allocated will depend on a number of factors, including their risk tolerance level, financial goals, age, and investment time horizon. This is why it is important that brokers don’t use a cookie-cutter approach when dealing with clients as everyone’s investing needs will vary.

Unfortunately, failure to diversify by brokers happens way too often. The effects can be further compounded when overconcentration is at play—meaning the financial advisor invested too much, sometimes even all, of an investor’s funds in one particular security or industry sector. Should that investment suddenly fail, the losses sustained can be catastrophic. If you are wondering whether your portfolio losses are due to concentration, Shepherd Smith Edwards and Kantas Overconcentration Attorneys (investorlawyers.com) can help you explore your legal options.

The Risks Involved In Improper Asset Allocation 

Brokers have a duty to make sure that any investment strategy or investment recommendations they make to a customer are appropriate for them. When unsuitable investment recommendations or bad advice leads to overconcentration and resulting losses, you may be able to file a FINRA lawsuit against your financial advisor for damages.

Not only does overconcentration happen way too often, causing many investors—from retail customers to retirees to high-net-worth individual investors to institutional investors—to suffer serious losses, but also, frequently a lack of diversification tends to involve too much of a customer’s funds being placed in illiquid, complex securities that are risky enough on their own. Our trusted broker-dealer negligence attorneys can’t tell you how many investors have come to us over the years because they lost a significant portion of their savings in:

• Oil and gas investments
• Private placements
• Alternative investments
• Non-traded real estate investment trusts (REITs)
• Real estate investment trusts (REITs)
• Structured products

Often, these same investors will tell us that they had no idea that these financial products were high-risk let alone that so much of their money had been placed in them.

Obviously, each situation is unique, but often the lure of high commissions and other fees from such investments may override a broker’s common sense and their duty to only make recommendations that are in an investor’s best interests. Regardless of whether broker misconduct or ignorance was at play, if you suffered losses caused by a failure to diversify, you may be able to hold the broker-dealer liable whether or not they knew that the financial advisor was improperly managing your account.

Why Hire Skilled Broker-Dealer Negligence Attorneys?

This is not the type of investor loss claim that you want to handle on your own or directly with your brokerage firm. Financial firms are unlikely to admit to negligence and they may try to blame other factors, including you, for your investment losses. Any communication that you have with them could be used against you later on.

When you retain the services of experienced concentration lawyers like us, you will have our entire securities law firm representing you while protecting your right to financial recovery. With over 30 years of fighting for investors, we have the knowledge and resources to build a solid FINRA arbitration on your behalf and go up against even the largest firms on Wall Street. Our efforts have helped thousands of clients collectively recover many millions of dollars through arbitration, mediation, and litigation.

Call the SSEK Team of Overconcentration Attorneys at (800) 259-9010 today or contact us online.