Investment management is a crucial aspect of financial planning. However, when financial advisors fail to fulfill their duties, it can lead to serious repercussions. A recent case has come to light where a client has claimed a failure to diversify out of a concentration position and lack of downside protection by their financial advisor, Susan Moseley of Moseley Investment Management, Inc. This case is currently pending and the alleged losses amount to $5,000.00.
Understanding the Allegation
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The client alleges that between November 2021 and May 2022, their financial advisor did not diversify their investments out of a concentrated position, and did not provide adequate downside protection. In simple terms, diversification is spreading investments across various types of assets to reduce risk. Concentration, on the other hand, is investing a significant portion of the portfolio in a single type of asset or a small number of assets. Downside protection refers to strategies that limit potential losses in a portfolio.
The FINRA Rule
According to the Financial Industry Regulatory Authority (FINRA) Rule 2111, financial advisors are required to have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. This is based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.
Why This Matters for Investors
Investors trust financial advisors with their hard-earned money, expecting them to make sound investment decisions on their behalf. A failure to diversify or protect against potential losses can lead to significant financial harm. This case highlights the need for investors to understand the strategies employed by their advisors and to be vigilant about their investments.
Moreover, it underscores the importance of holding financial advisors accountable for their actions. If a financial advisor fails in their duty, investors should not hesitate to seek legal recourse. This is where Haselkorn & Thibaut, a national investment fraud law firm with over 50 years of experience, steps in.
Red Flags for Financial Advisor Malpractice
Investors need to be aware of certain red flags that may indicate financial advisor malpractice. These include lack of diversification, failure to provide downside protection, and making unsuitable investment recommendations. Other red flags include unusual account activity, unauthorized transactions, and failure to disclose important information.
Recovering Losses Through FINRA Arbitration
Investors who have suffered losses due to financial advisor malpractice can recover their losses through FINRA Arbitration. This is a faster and less formal alternative to litigation. Haselkorn & Thibaut specializes in helping investors recover losses through FINRA Arbitration. With offices in Florida, New York, North Carolina, Arizona, and Texas, they have a successful track record of financial recoveries for investors and an impressive 98% success rate. They also offer a “No Recovery, No Fee” policy.
Currently, Haselkorn & Thibaut is investigating the advisor and company involved in this case. They offer free consultations to clients and can be reached at their toll-free consultation number 1-800-856-3352.
Investment management is a serious business, and when things go wrong, the repercussions can be financially devastating. But with the right help, investors can recover their losses and hold the responsible parties accountable.
