A financial advisor who develops a close emotional relationship with a
client may engage in unethical practices that lead to advisor misconduct
or fraud. Although many financial advisors have close professional relationships
with their clients without any problems, some advisors develop close personal
relationships as a means of deception.
Finding the Right Financial Advisor
Unethical advisors often manipulate their clients' emotions to persuade
them to invest in certain products that increase advisor profits. To prevent
potential misconduct and losses, it's important to
maintain a professional relationship with a financial advisor. Here are some red flags that may signal the
advisor is getting too close for comfort.
The Advisor is Overly Enthusiastic About Proposed Investment
Advisors who try to steer clients towards risky investments with enthusiasm
may have their own profits in mind, rather than the clients' profits.
Investors should be cautious of advisors who seem to be overconfident
and make bold predictions, because there is no such thing as a sure thing.
The Advisor Doesn't Discuss Fees
Financial advisors should explain different fee structures related to investments.
Fees for management services, investment advice, brokerage costs, and
third-party fees are often rolled up in wrap-fees which can cost the investor
more than individual fees.
The Advisor Relationship is Difficult to End
Financial advisors who get too close want to make it more difficult to
end the relationship. In such cases, many clients stay with their advisor
even when they feel unsatisfied with performance or are otherwise uncomfortable,
because they think finding a new advisor will be too hard. In actuality,
finding a new advisor is not that difficult.
If you or a loved one has suffered investment losses as the result of investment
misconduct, contact a securities fraud lawyer at Meyer Wilson by calling
us toll-free at 888-390-6491 to
schedule a free case evaluation today.