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How Can You Tell Whether Your Broker or Advisor Caused Your Losses?

by Jay Salamon on November 6, 2012

in Securities Law

When you lose a lot of money in an investment account, you may wonder whether your financial advisor was to blame. A definitive answer usually requires a careful review of account records by someone who knows what to look for. But it’s not difficult to figure out whether the circumstances of your loss warrant suspicion and mandate further investigation. Just ask yourself a simple question. Did something happen that you didn’t expect or that your advisor told you wouldn’t occur? It’s as basic as that.

Say you lost more money than you thought you could lose or more money than the advisor said you could lose. You should be very suspicious about whether the advisor misled you or sold you a product that was unsuitable. For example, advisors often tell customers that an investment is safe and investment principal will be protected, or they’ll claim the investment is comparable to a Certificate of Deposit but with a better return. If you bought such an investment and then incurred a big loss, you’d be wise to suspect your advisor. The same would be true if, for example, you lost 40%-50% or more of your invested funds even though you originally told your broker you were a “conservative” or “moderate” investor.

Surprise that should arouse suspicion may not be limited to the unexpected size of your loss. Maybe the stated value of your investments fluctuated wildly, even though your broker said the products would provide protection from volatility. Maybe your advisor told you the invested funds would always be readily accessible, but when you tried to cash in, you found out there would be a prepayment penalty or there was no market on which to sell it.

Consequently, it’s the occurrence of surprise, the experience of unforeseen consequences, the contradiction between what happened and what you were told or led to believe would happen, that constitutes the key indicator of wrongdoing by a financial advisor. The recognition that you’ve experienced this sort of disconnect is your cue to contact an experienced investment lawyer.

We humbly recommend that you contact us — the investment lawyers of Hermann, Cahn & Schneider LLP. We’ll do an entire preliminary workup of your case, free of charge and without any obligation on your part to retain us. If your case isn’t legally, factually, or financially justified, we’ll carefully explain why. If we think you should pursue compensation, we’ll tell you the strengths and weaknesses of your case, how the arbitration or litigation process works, how much it might cost, how long it likely will take to complete, and how our fee (if any) will be determined. Then, and only then, will you need to decide whether to hire us.

Please contact us through our online form or e-mail us at [email protected], or call us at 216-781-5515 or toll free at (888) 845-6665.

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