What Really Constitutes a Suitable Investment?

Especially in a time when the market is volatile, and both investors and financial advisors are scrambling to protect their investment, the door opens wide for investment misconduct. In times of trouble, the likelihood that a broker will make an unsuitable investment recommendation increases dramatically.

When your broker recommends an investment, you trust him or her to choose investments that are suitable for you and your financial situation. A couple of examples of suitability can be:

• The broker has researched the investment, understands how it works and who is involved, and decides that the opportunity is solid enough to recommend based on your circumstances. For example, a confusing structured product is generally not suitable for many investors.
• The broker has researched the financial product, understands it, and feels that it is appropriate for you, your risk tolerance, and your financial goals -- for example, a volatile stock that has great potential may not be suitable for a retiree trying to protect a "nest egg," even though it may be suitable for another investor with better risk tolerance.

You broker should look at any investment in light of your specific needs before recommending it to you. If your broker fails to research the product, offers a product to you that doesn't match your financial needs, or recommends an investment for which he receives an incentive without considering if it is right for you, then you may have an unsuitability claim.

If you suspect your broker made an unsuitable investment recommendation to you, you may have one of the following claims:

• Breach of fiduciary duty
• Negligence

It can be a fine line, and even if a firm's agreement doesn't say a fiduciary duty is owed, the circumstances may dictate otherwise. If you are pursuing a suitability claim, it is highly recommended that you contact an experienced investment misconduct attorney who can examine your specific case and explain your options for recovery.

If you believe you may have an unsuitability or investment misconduct claim, it is important to act quickly. Time limitations may apply, and they could be different depending on how you decide to approach your case. Speak with an experienced FINRA arbitration lawyer today at 1-866-8-BROKER (866-827-6537) today, and schedule a completely free and confidential legal consultation. We look forward to answering your questions and helping you form an action plan to recover your losses. Also, help yourself to a FREE copy of our book: Five Signs of Investment Fraud ...And What to Do if it's Happened to You.