Over-Concentration
San Antonio Over-Concentration Lawyers – (210) 298-6666 - (800) 519-2800
Many people turn to investment firms and financial advisors to help manage their personal assets because they simply do not understand how to successfully invest those assets. Consequently, financial advisors and brokers are left with the responsibility of listening to client needs, taking into account the type of investment strategy that the client is willing to put their faith into, and investing client assets accordingly. However, not all financial advisors and stock brokers acknowledge sound investment practice, and unfortunately sometimes utilize over-concentration techniques in order to reap maximum profits at the expense of client portfolio stability.
Over-concentrations is the practice of investing assets predominantly into one particular sector, into one specific stock, or into one particular industry. Plainly put, failure to diversify places a client's portfolio at considerable risk if the invested in sector/industry/stock experiences a decline. While over-concentration may lead to gains, the risk involved with employing such investment strategy is far too great, even for the most daring investor. Therefore, it is not commonplace at all for financial advisors and brokers to be asked to over-concentrate a portfolio at the behest of a client, and all unauthorized instances where over-concentration takes place represent negligence. Brokerage firms, financial advisors, and stock brokers who practice over-concentration with client assets (against the client's wishes) can be held liable for doing so.
Clients provide financial advisors and brokers with certain criteria that they would like to be met. For example, an investor may wish to have his or her assets invested in low-risk, low-yield bonds as a means of ensuring that the investment will not depreciate considerably over time. Another investor may want to place his or her assets in high-risk, high-yield stocks, simply to achieve the maximum return rate available over a relatively short period of time. Regardless of what type of strategy that an investor wishes to employ, that investor's wishes need to be at the forefront of financial advisor decision making, which should never include over-concentration of assets.
If you've been a victim of negligent acts or omissions on the part of your financial advisor or broker, particularly if over-concentration played a hand in the process, please don't hesitate to contact the investment fraud attorneys at Cichowski & Gonzalez. P.C. Our experienced Texas over-concentration attorneys will see to it that negligent advisors and brokers and held liable for their actions. For more information and a free initial consultation, please don't hesitate to call us today at 800-519-2800.