More recently, brokers have been pitching investors on new, alternative
investments. Alternative investments are those that are put into certain
classes such as real estate, hedge funds, commodities, private equities,
and more. These are often risky investments, but they are touted as benefits
to investors. Brokers often inform investors that because these investments
don’t have to abide by the same regulations as stocks, bonds, or
cash, that they provide many benefits. This isn’t always the case.
Watch As Attorney Chad Kohler Explains Alternative Investments
Because there is a lack of regulation, there is no transparency and the
broker may not inform you of the investments to which your money is going.
It is important for you to act with caution if your investor is pushing
you towards alternative investments. While the advisor will discuss the
many rewards associated with the high risk, they may not inform investors
of the large losses that can also affect an entire portfolio. Alternative
investments can leave an investor with absolutely no money whatsoever
and a completely empty portfolio.
With alternative investments, it is possible that your broker has invested
in something with no liquidity. This means that you won’t have access
to your funds if you need them. If things go bad, you can lose that money
due to not being able to pull your funds.
Research is very important when it comes to alternative investments. There
are many risks of which to be aware and discussing these options with
multiple brokers or brokerage firms can give you the information you need
to make an educated decision moving forward.
Our team of securities lawyers has represented numerous investors who have
lost money due to alternative funds. At Meyer Wilson, we make it a priority
to work for our clients, always focused on recovering their losses. If
you have lost money, reach out to us for your
complimentary consultation and see if we can help you.