What You Should Know To Make Sure Your Brokers Are Properly Managing Your Assets
Any time you invest, you are taking on a degree of risk. Some investments are significantly more high-risk than others. Just because a financial product comes with risks doesn’t necessarily mean you should stay away. Many High-Risk Investments vehicles can increase your returns much more than conservative, low-to-no-risk investments.
However, high-risk investments are not suitable for every investor, including most retail customers, conservative investors, retirees who are dependent on their life savings, and inexperienced investors. Most of these individuals don’t qualify as “accredited investors,” which is what you need to be if you want to get involved in many risky investment products. One of the main reasons for this is that with the opportunity for higher returns often comes a greater risk to your money and not everyone can handle huge financial losses. (Unfortunately, there are financial advisors who will still opt to recommend and sell certain risky investment products to investors, including non-accredited investors, even when they are unsuitable for them. The incentive of high commissions and fees has been known to override some brokers’ fiduciary obligation to look out for clients’ best interests.)
Investor Lawyers Blog
