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Investment Advisor's Errors Can Be Compensated

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Investors are no longer willing to bear the brunt of mismanagement of investment portfolios, or trusts. In addition, investors are more savvy when it comes to questioning hidden fees or improperly calculated fees which negate or reduce the gains on their investments. Prudent investors are consulting with lawyers in reviewing charges, fees, or circumstances surrounding significant investment losses.

Many investors are surprised to learn that their stockbroker or investment advisor, whom they trusted to manage their precious retirement funds, did not have a college degree or any prior investment experience. Many investors simply assume that if their stockbroker or investment advisor is affiliated with a large investment company, they must have a college degree, or courses in economics, or prior investment experience. This is not always true, nor are these background credentials even required for a person to become a licensed stockbroker or investment advisor.

Investors should also pay careful attention to the risk survey which they complete. The level of risk tolerance that an investor has will be a critical factor in the event that significant losses occur. If the investor checked off on the survery that they wanted to invest in equities or stocks with high risk, it may be difficult to recover any of the losses. On the other hand, if the investor indicated they did not wish to be in high risk stocks or equities, and the advisor of broker put them into high risk equities, and losses ensued, the investor stands a better chance of recovering some or all of their losses.

A wise investor should always contact an attorney when they feel their account fees are excessive, or where their investments have sustained significant losses. At a minimum, an investor should have a very clear understanding of their advisor or stockbroker’s education and experience before entrusting their hard-earned dollars.