As is so often the case, many clients over-extend their trust with the wrong stock brokers or investment advisors resulting in investor malpractice which remains overlooked and unaddressed until extensive damage has been done.

Luckily attorneys that specialize in this form of malpractice exist to address specific client needs and recover your assets from dishonest and negligent brokers or investors.  However, as mentioned many people ignore the warning signs that could help to alarm them sooner to action before a final breaking point in an investor/client relationship.

Many people never consider financial malpractice to be as commonplace as other forms of malpractice such as the more widely publicized medical malpractice.  However, every day someone in a position of professional responsibility acts negligently or by omission in a way that leads to the recommendation of an investment that fails to meet the standard of ethical guidelines in their field of practice resulting in financial loss or injury.

One of the first things to consider when investing is the type of relationship that needs to be established in order to make the smartest financial decisions that are personally tailored to your budget and fiscal goals.  If an advisor is ever urging you to make a quick investment before having worked up a detailed profile of your holdings and discussing both short and long-term goals, chances are this is a red flag that you are dealing with a shady or inexperienced investor.

In failing to understand their client and their client’s needs, an advisor may be doing harm and causing injury to you and your family.  Every trustworthy advisor will begin by getting to know their client and at the very least ask a series of questions to begin the process of suggesting initial steps to building a portfolio.

Another red flag is the promise of “easy money”.  Nothing in the market is 100% risk free.  Some ideas may be tempting for inexperienced advisors, and for risks that fall out of the scope of your usual level of tolerance or investment history, a trustworthy advisor will always consult the client to provide solid reasoning and practical explanations of the stipulations involved with a particular investment opportunity.

Similarly a good advisor will never try to tie all of a client’s options in single investment.  If your advisor does not diversify your portfolio or ever suggests throwing everything at a single investment, this should be a very strong warning against their reliability.

It is important to remember that you are in control of the ultimate fate of your investments.  If you ever feel ignored or completely left out of the decision making process, it may be an indication for concern.  If the advisor ever wants to you to make quick, uniformed decisions or intentionally dodges questions or extensively avoids contact, it is time to act.

 A financial advisor may not omit details to or misrepresent the risks or rewards of a recommendation.  If this ever occurs accompanied with any of the warnings listed, it is time to seek legal help.  This may very well prompt you to fire your financial advisor and file a complaint.

Suits like this can be costly and require complex steps to insure recovery of lost funds through negligence or omission.  Never wait too long to contact a legal advisor.  Maybe you’ve noticed a similar occurrence to one that has been mentioned.  It is time to act now.

A little advice early in the process of a bad experience with a financial advisor could translate to the salvation of your retirement, children’s college fund, the value of your home or all of these examples combined.  If you ever think that you may need to ask, go ahead and ask a professional with an experienced history in the area of medical malpractice law.

Frank Cristiano is a Denver Malpractice attorney and law blogger for Cristiano Law

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