Overconcentration Attorneys

Are You The Victim of Overconcentration by Your Broker? Shepherd Smith Edwards and Kantas Overconcentration Attorneys Want To Talk To You

As an investor, you are always taking on a certain degree of risk. What you invest in is as important as whether or not your portfolio is properly diversified. This means making sure you aren’t placing all of your money in just one product or asset class especially if it is a high-risk one. As a matter of fact, according to market experts, diversification is considered a solid investing strategy and it can minimize the risk and magnitude of your losses if certain investments do poorly.

If you have hired a broker to manage your portfolio, it would be wonderful to think that they would automatically and properly diversify your assets according to your financial goals, risk tolerance level, age, investing experience, and other key factors. Unfortunately, that doesn’t always happen and many investors end up losing money because their financial adviser overconcentrated their account.

What Is Overconcentration?

This is the term used for what happens when an investor has too many holdings in one particular investment, asset class, or market segment in relation to their entire portfolio. This might look like all of your money in one security, company, or industry sector, and a failure to include other kinds of investments, such as different stocks and bonds,  to balance out your assets. Overconcentration is a high-risk investing strategy because you are essentially placing most or all of your “eggs in one basket,” which can result in serious, and potentially even total loss. According to the Financial Industry Regulatory Authority(FINRA), some examples of concentration risks are:

• Intentional concentration—making the purposeful decision to overconcentrate the account. A sophisticated investor might choose this investing strategy and be willing to take on the risks because of potential gains.
• Concentration in illiquid investments—there are many investors who lose money in real estate investment trusts (REITs), private placements, and other alternative investments that are hard to sell quickly.
• Concentration because of asset performance—if one asset continues to do well, your diversified portfolio could end up becoming overconcentrated over time.
• Concentration by asset correlation—investments are made in different securities that share similar characteristics.

Our Overconcentration Attorneys Can Represent You Against Your Broker-Dealer

Brokers are supposed to conduct the proper due diligence to make sure that they don’t inadvertently—or sometimes, purposely—concentrate an investor’s portfolio. Unfortunately, the lure of high commissions can cause them to disregard customers’ best interests.

If you suspect that your broker overconcentrated your account, Shepherd Smith Edwards and Kantas (investorlawyers.com) can help you assess whether you do, indeed, have grounds for pursuing damage.  This is not something that you should do without seasoned concentration attorneys by your side. As a matter of fact, it is important that you do not try to resolve this dispute directly with your financial advisor.

Most broker-dealers will try to refute or discredit claims of broker misconduct or negligence because they don’t want to have to pay you for your losses. This is just one of the many reasons to hire savvy overconcentration lawyers.

We have been fighting for investors against broker-dealers and investment advisers for over 30 years. We know how to maximize our client’s chances for a full recovery.

How To Contact Our Overconcentration Attorneys:

Call (800) 259-9010 today.