“Normal” in this market, or is it your broker’s responsibility?
Due to the strained economy over the past few years, investors have come to expect periodic – or even regular – decreases in the values of their investments. However, not alllosses in your investment portfolio including your IRA or 401(k) should be automatically chalked up to the troubled stock market.
When do you need to look more deeply into the causes of your losses? What losses are “normal” and the result of the weakened economy? Could your stock-broker or financial advisor have engaged in wrongdoing?
Over the next weeks we will post a series of articles addressing different issues that may suggest that your broker or advisor could be responsible legally for your losses. An isolated loss might, or might not, be due to malfeasance on the part of your investment advisor. However, you ought to consider talking with an experienced professional whom you can trust if you feel uncomfortable with your
portfolio’s performance or your advisor’s answers to your questions about your investments.
Here are a few “red flags” that should cause you to dig further:
• Your statement shows trades you did not authorize and you have not given your broker permission to make trades at his or her discretion;
• If you gave your broker discretion to make trades, there seem to be an excessive number of frequent trades;
• Investments your advisor assured you were “safe” or “sure winners” have suffered serious losses;
• You told your broker that you wanted to stay in safe investments or that you have a “low risk tolerance,” but investments he or she has recommended have shown wild swings in values;
• Your broker pressured you to consent to unusual investments you did not fully understand, and those investments are performing badly;
• When you ask questions about your investments, you advisor dismisses your concerns or answers in generalities; or
• Your advisor does not promptly return your phone calls or answer your emails with questions about your holdings.
If you have experienced any of these issues or concerns, you should put your mind at ease and speak with an attorney with experience with these issues.
Please see our upcoming posts for more information on related issues.
