Robo-advisors and AI investing apps are everywhere. They promise simple investing, automated decisions, and portfolios matched to your risk tolerance. For many investors, they sound safer, smarter, and less stressful than traditional investing.
But an increasing number of investors are discovering a different reality. They followed the app’s recommendations, selected what they believed was a conservative or moderate strategy, and still suffered losses that did not align with their expectations.
If that sounds familiar, the issue is not whether investments can lose money. The real question is whether the investment strategy you were placed into was suitable for your stated goals and risk tolerance, and whether the risks were clearly disclosed before your money was invested.
Most robo-advisors follow a similar process. You answer a questionnaire about your goals, timeline, and comfort with risk. The platform assigns you a risk profile and builds a portfolio it claims is appropriate for you.
Problems often arise when questionnaires are overly simplistic, investors are nudged toward higher risk profiles, portfolios behave more aggressively than advertised, or marketing language minimizes downside risk.
Investment suitability asks whether a strategy made sense for you based on your age, financial goals, investment experience, income, net worth, and ability to absorb losses. A platform cannot market a portfolio as personalized while ignoring the information you provided.
Investors often experience losses because conservative portfolios behave aggressively, complex products are included without clear explanation, risk questionnaires fail to capture real circumstances, marketing understates risk, or conflicts of interest are not clearly disclosed.
If you believe your losses may be tied to an unsuitable strategy, documentation is critical. Save your risk questionnaire responses, screenshots of your risk profile, account statements, trade confirmations, marketing materials, and communications with the platform.
ChapmanAlbin represents investors in matters involving investment losses. When evaluating robo-advisor or AI investing app claims, we analyze what you were told, how your risk tolerance was documented, how your funds were invested, and whether the losses were foreseeable.
If you lost money using a robo-advisor or AI investing app and believe your portfolio did not match the risk level you selected, you may have options.
To discuss an investment loss or robo-advisor suitability issue, contact an attorney at ChapmanAlbin at (877) 410-8172 or email [email protected].
This article is for informational purposes only and does not constitute legal advice. Results depend on the facts of each case.
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