Denver Overconcentration Attorneys
Our Colorado Securities Firm Helps Investors Recoup Losses Caused By Diversification Failures and Broker Fraud
Imagine that you are a Colorado investor who entrusted your life savings to a brokerage firm. You have high hopes that not only will your financial advisor keep your money safe, but also, they might be able to help your assets grow. Until one day, you find out that a lot of your funds are gone, not because anyone stole them, but because your broker excessively concentrated your funds in an investment.
At Shepherd Smith Edwards and Kantas (investorlawyers.com), our Denver Overconcentration Attorneys can help you assess whether your portfolio losses warrant grounds for suing your broker-dealer or investment advisor for damages. Contact us today to request your free, no-obligation case consultation.
Why Can Overconcentration Be So Harmful For Investors?
Overconcentration is what happens when too much of an investor’s money is placed in one security, asset type, or industry. While for some sophisticated, wealthy investors, as well as institutional investors, this is a purposeful strategy meant to generate high returns, excessive concentration is unsuitable and too risky for most retail investors, conservative investors, novice investors, and retirees.
A failure to diversify a portfolio removes the buffer of having other kinds of investments that could offset losses that occur in one specific asset or asset type.
It doesn’t help that one of the reasons that overconcentration can happen is that a financial advisor may have become enamored with one particular kind of investment because it pays high commissions. Our Denver Overconcentration Attorneys cannot tell you how many times an investor has come to us saying that they don’t know why their broker excessively concentrated their funds in a private placement, a real estate investment trusted, an exchange-traded trust, or some other too risky alternative investment when the priority was to create a portfolio that was well-balanced with little-to-no risk.
Types of Overconcentration:
Intentional Concentration: As our Denver, CO securities law firm mentioned, this is a deliberate investing strategy that the experienced investor understands and has chosen.
Asset Performance-Based Concentration: This typically involves strong performance by an investment to the degree that it grows enough to become a bigger part of an investor’s portfolio. This can lead to overconcentration and why it is so important that a financial advisor monitor every customer account to make any necessary adjustments so this doesn’t happen.
Correlated Asset-Driven Concentration: On the surface, a portfolio may appear to be diversified because there are a variety of assets. However, if the assets belong to the same industry or are the same kind of asset type, overconcentration may be at play.
Company Stock-Related Concentration: It is not uncommon for employees of a company to end up with a lot of their retirement funds in their employer’s stock. This could prove problematic if the company shuts down or its stock plummets in price.
How Can Our Denver Overconcentration Attorneys Help?
If you suspect your portfolio losses may be due to overconcentration by your broker-dealer, it is important that you explore your legal options right away. It is also key that you DO NOT approach your financial advisor and try to resolve this with them directly.
Most broker-dealers and investment advisers will not readily admit to mistakes or doing anything that could have contributed to your investor losses. They may even try to blame you or even delay/sabotage your efforts to get your money back.
Shepherd Smith Edwards and Kantas Denver Overconcentration Attorneys can help you determine the cause of your portfolio losses and whether broker misconduct or negligence, including a failure to diversify, played a role. We work with Denver investors and investors throughout Colorado in pursuing the damages owed to them by their broker-dealer or investment adviser
When you work with us, you are retaining everyone at our firm to fight for you. We have helped thousands of investors to collectively recoup many millions of dollars through our skilled efforts and dedication.
Contact Our Denver Overconcentration Attorneys to schedule your free, initial case consultation:
Throughout the Denver Metropolitan area and the rest of The Centennial State, call (720) 439-2827 or (800) 259-9010 or fill out this form.
Our Denver Securities Law Office:
1700 Lincoln St #2710
Denver, CO 80203