Your general risk tolerance is one of the most basic considerations when
it comes to investing, and your broker or financial adviser should be
paying attention. Investment misconduct lawyers see many unsuitable investment
cases that involve a financial professional ignoring a client’s
risk tolerance, and it happens more often than you might think. That’s
part of the reason it’s so important to understand the relationship
between your risk tolerance and your own portfolio.
What Is “Risk Tolerance”?
Your risk tolerance is essentially your ability to withstand declines in
your portfolio. When determining your risk tolerance or attitude toward
risk, you will want to focus on your own short- and long-term investment
goals. What do you hope to accomplish with a particular investment? What
happens if you lose your initial investment? What kind of time frame are
you looking at? Can you handle some short-term losses for a better return
over time? Discuss these kinds of concerns with your broker or financial
adviser and always carefully consider your risk tolerance.
What Does That Have to Do With Investment Misconduct?
Unfortunately, some financial professionals may put their needs above the
needs of their clients and, for example, ignore a client’s risk
tolerance to generate more commissions or more fees on an unsuitable investment.
Your broker or financial adviser has a duty to recommend investments that
are suitable for you based on a number of factors, including your current
financial circumstances, your investing goals, and your tolerance for
investment risk. If he or she fails to take these elements into account
and you lose money, then you may have a claim.
If you believe you have lost money because your broker recommended an unsuitable
investment, it’s important that you reach out to someone who can
help you decide the steps to take next. The investment misconduct lawyers
with Meyer Wilson have represented hundreds of investors across the nation
in stockbroker mediation, arbitration, and litigation, and we encourage
you to speak with us if you need help. Please give us a call today to
schedule a completely free, no-obligation case evaluation with an experienced