When you make the decision to invest your money with a stock broker, you assume that they have your best interest at heart. You figure they are going to take the time to go through and make sound investment decisions on your behalf. After all, you are paying them a nice fee for their services. Along with any type of investment, there is always a risk of loss. While most assume that portfolio losses are the result of a dip in the market, that isn’t always the case. There is also the risk of broker misconduct as well.
Types of Broker Misconduct
Unsuitable Investments – Oftentimes, brokers will sell you a portfolio filled with high-risk stocks. While this might be acceptable for some, it isn’t for everyone. The broker has the responsibility to learn about your income, risk tolerance, investment experience, and goals before they recommend an investment for you. If you are a widow or someone already in a stressful situation, the broker shouldn’t recommend a high-risk portfolio. They need to be focused on your best interest, otherwise, they could be convicted of fraud.
Omitting Facts – A stock broker has a duty to divulge all of the information possible about the stocks you are looking to invest in. If they withhold facts that could impact your decision about whether to invest in that stock or not, they could be at risk of committing fraud. They need to make sure they disclose all relevant information to you. While brokers can make an honest mistake and give out bad information, that isn’t the same as purposely holding information back for their own gain.
Unauthorized Trading – If the broker made a purchase on your account that you didn’t authorize, they could be in serious trouble. The only time that they are allowed to do so is if you gave them detailed permission or they had discretionary authority. Otherwise, they are committing fraud.
While these are only a few examples of broker misconduct, there are countless others as well. In the event you were misled and believe you were taken advantage of, you need to turn to someone who has your best interest at heart. You work hard for your money and deserve to recover any funds lost due to broker misconduct.
Recovering from Investment Losses
Recovering from your losses isn’t as easy as you might think. If you lose 20 percent one year and gain 20 percent the following year, that doesn’t mean you are even. In order to come out ahead and get back to where you were, you actually have to recover more than what you lost. The reasoning behind this is that your return is based on your total portfolio.
Let’s say you started with $50,000 and lost 20 percent, or $10,000. Now, your portfolio is only worth $40,000. If the market goes up by 20 percent the following year, you are only going to end up recovering $8,000 instead of the $10,000 that you would have made had your portfolio been at the original $50,000. That means you are still down by $2,000. So, your 20 percent return isn’t going to get you back where you would have been had the loss not occurred in the first place.
Larger losses require even more of a return to get back to where you once were. Depending on how the stock market is performing, it could end up taking years for you to get back all of the money that you lose along the way because of the loss. Many often end up taking on additional risk in an attempt to recover their money faster, but that isn’t necessarily in your best interest. You have to be realistic about the amount of risk your portfolio should have and the length of time it is going to take to bounce back from your losses.
Hiring a Professional to Help
Cold Spring Advisory Group has more than 25 years of trading experience and branch management. When you work with them, you are dealing with a team who has extensive experience in the field and knows what it takes to get your money back.
Their initial consultation is free, so you have nothing to lose and everything to gain. Their flat-rate retainer includes the cost of filing your claim, expert witnesses, and arbitration panel costs. All attorneys work on a contingency basis, so there are no unexpected surprises. The line of services includes case evaluations, case preparations, investment forensics and group claims.
Cold Spring Advisory Group takes the time to listen to what it is that you have to say and work to come up with the best solution possible to help you recover from your losses. You aren’t alone. Contact their team of professionals at Cold Spring Advisory Group today.