Houston Overconcentration Law Firm

Houston Overconcentration Law Firm. We are Texas Broker Fraud Attorneys Committed to Helping Investors Recoup Damages

Unless you are a sophisticated investor who is purposely choosing to use excessive concentration in your brokerage account to maximize your returns—and you understand the risks—then this is likely an unsuitable investment strategy for you. Yet even for experienced and wealthy investors, a failure to diversify your portfolio could prove financially detrimental.

At the Houston Overconcentration Law Firm of Shepherd Smith Edwards and Kantas (investorlawyers.com), we represent Texas investors of all levels of investing experience in recouping losses caused by broker misconduct, including overconcentration. Whether you are a retail investor, a retiree, an older investor, an accredited investor, an institutional investor, or a high-net-worth investor, and you would like help determining whether you have grounds for an investment loss recovery claim, contact our Houston, Texas securities law office today. We offer a free, no-obligation initial case consultation.

The Risks of Overconcentration and How It Can Lead To Serious Portfolio Losses

Generally, it is important that an investment portfolio is properly diversified. Overconcentration is what happens when too much of an investor’s assets are placed in a particular security, asset class, sector or industry. Should the investment in which there is too much concentration fail, there may not be enough other kinds of investments in the account to cushion the loss.

Concentration can happen in different ways, according to the Financial Industry Regulatory Authority:

Intentional concentration: This approach is employed deliberately by an investor, especially if they think a certain investment or asset class will do well.

Asset performance-related concentration: When an investment in a portfolio performs much better in relation to the others in the brokerage account, this can lead to excessive concentration.

Concentration in company stock: An employee’s retirement account becomes oversaturated with their employer’s stock.

Correlated asset-caused concentration: There may be different investments in a brokerage account, but they are all from the same asset class or industry. For example, an investor may have a variety of oil and gas investments in their portfolio, but then an oil crisis hits, leading to a plunge in the value of all of the shares.

Illiquid investment concentration: These are investments that could take years to resell, or there may not be a secondary market available to them. Too many illiquid investments, such as the following, in an account can be harmful to many investors:

Private placements
Reg D offerings
Real Estate Investment Trusts (REITs)
Non-traded Real Estate Investment Trusts (Non-traded REITs)
Delaware Statutory Trusts (DSTs)
Business Development Companies (BDCs)
Oil and Gas investments
Exchange Traded-Funds (ETFs)
Annuities
And more.

Broker-dealers and their financial advisors are supposed to avoid overconcentration in a customer’s account unless you are an experienced investor who wants to employ this kind of high-risk strategy. Not only that, but stockbrokers must regularly monitor their customers’ accounts to make sure that excessive concentration has not become a problem, even if it wasn’t one before.

What Should You Do If You Suffered Investment Losses Due To Overconcentration By Your Broker?

Contact our Houston Overconcentration Law Firm. Shepherd Smith Edwards and Kantas has been fighting for Texas investors for decades. We know that a failure to diversify by your financial advisor caused your losses or exacerbated ones that occurred due to other reasons.

It is important that you do not try to resolve this matter directly with your broker-dealer. Most firms would rather blame you or deny your allegations than pay you damages without putting up a fight. Our Houston Overconcentration Law Firm represents Lone Star State investors in arbitration, mediation, and litigation.

We are here to maximize each of our clients’ chances for a full financial recovery. We work on a contingency basis, which means you will only pay for our legal services if we secure an award or settlement on your behalf.

Contact Us Today:

Call (936) 251-0033 or (800) 259-9010 or fill out this online form.

Our Houston Overconcentration Law Firm:

1010 Lamar St #900
Houston, TX 77002