Our Ridgway, CO Securities Law Firm Represents Investors Who Have Suffered Losses Due To Inappropriate Broker Recommendations
Throughout Western Colorado, Shepherd Smith Edwards and Kantas (investorlawyers.com) represents retail investors, retirees, accredited investors, institutional investors, high-net-worth investors, and ultra-high-net-worth investors who have sustained serious portfolio losses because their financial advisor recommended a product, trade, or strategy that was unsuitable. Unsuitability is a serious problem in the brokerage industry and one of the most common reasons that investors end up suing their financial advisor and the brokerage firm of record for damages.
Over the decades, our Ridgway, CO unsuitability attorneys have helped thousands of investors to secure settlements and awards from broker-dealers.
Unsuitability and The Harm It Causes Western Colorado Investors
Financial advisors are supposed to become familiar with each client’s investment profile. They must have reasonable grounds for believing an investment, transaction, or trade is appropriate for a customer, given their age, risk tolerance level, financial goals, financial circumstances, level of investing experience, liquidity needs, tax status, investment time horizon, and other key factors. See FINRA Rule 2111: Suitability.
What Are The Three Kinds of Suitability Analysis?
Reasonable-Basis Suitability: The broker must conduct the necessary due diligence before arriving at the conclusion that what they are recommending would be suitable for at least some investors.
Customer-Specific Suitability: The financial advisor must ensure that what they are recommending is specifically appropriate for the customer to whom they are making the recommendation.
Quantitative Suitability: How will this recommendation impact the rest of the customer’s portfolio? One transaction, when assessed in isolation, might be suitable for the customer, but can the same be said for multiple transactions involving the same investment? Cost-equity ratio, excessive trading, and turnover rate should be examined to ensure quantitative suitability.
Signs of Possible Unsuitability in Your Brokerage Account:
- The investments in your portfolio are not a proper fit given your investment profile.
- Your money has been placed in too risky investments, even though you are clearly risk-averse.
- Your account is overconcentrated with too many of the same kinds of investments or asset types.
- There are excessive or unauthorised trades in your account.
- When you try to talk to your broker about your concerns, they don’t return your calls or are vague in their explanations.
Some examples of unsuitability: An elderly senior with serious health issues finds that most of her life savings are gone because her broker inappropriately invested her money in high-risk, illiquid investments. A retail investor with little investing experience ends up losing money in volatile oil shares that their broker never should have placed in their portfolio.
Even institutional investors and experienced, wealthy investors can suffer losses due to unsuitability.
Why Do Brokers Make Unsuitable Investment Recommendations?
Inexperience, inadequate training, ignorance, misconduct, negligence, or greediness because a financial advisor would rather earn higher commissions from risky or illiquid products than do what is appropriate for the customer–whatever the reason, if your broker engaged in unsuitability, you may be able to file an investment loss recovery claim.
I’m A Western Colorado Investor. What Should I Do If I Suspect My Portfolio Losses Were Caused By Unsuitability?
Do NOT try to resolve your concerns directly with your broker. Most brokerage firms would rather deny any allegations of unsuitability, perhaps even blame you. They might even try to sabotage any chances you have for filing a legal claim.
Contact our Western Colorado unsuitability law firm and schedule your free case consultation. Shepherd Smith Edwards and Kantas has represented many investors who were victims of unsuitability. We can help you determine whether your losses warrant filing a lawsuit for financial recovery.
We are seasoned Ridgway, CO securities attorneys who have worked with Colorado investors to sue their broker-dealers and investment advisers in arbitration, mediation and litigation. If we decide to work together, we will file a complete investment loss recovery case on your behalf and represent you in FINRA arbitration.
Contact Our W. Colorado Unsuitability Lawyers Today:
Call (970) 239-7085 or (800) 259-9010.
241 S Elizabeth St #500
Ridgway, CO 81432