What is investment overconcentration?

Financial advisors and brokers have a responsibility to ensure that investments are diversified, meaning investments are spread out between and within asset categories in accordance with the investor’s individual circumstances and financial goals. By diversifying wisely, fluctuations and losses can be limited. Overconcentration occurs when your broker places undue emphasis on one category of investment or security.

Is investment overconcentration risky?

Diversification is often critical to creating a balanced, profitable investment portfolio. In a constantly fluctuating market, a broker that invests all or a large amount of funds in one investment product or sector can drastically increase the potential for you to lose money.

What can you do if your broker caused an overconcentration in your investment portfolio?

When recommending securities liquidation, a broker-dealer must consider whether that will cause an overconcentration in a particular type of securities remaining in your account. Changes or activity that your advisor recommends for your account should always involve a thorough examination of the composition of the remaining securities investments, so that your portfolio always matches your goals and investment profile. If your broker or brokerage firm caused an overconcentration of a particular security in your account, and you suffered serious losses as a result, they may be held liable. You should promptly contact an experienced investor rights attorney to review your case.

Take the next steps to find out if you have a claim:

Step 1.

Talk to an Experienced Attorney Today

Call and speak to one of our attorneys* for a no-cost consultation to discuss your situation, answer your questions, and help you determine the next steps. This call usually takes about 15 minutes, but we are happy to talk to you as long as you would like!

Step 2.

Quick Review of Your Paperwork

If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.

Step 3.

Signed Attorney/Client Agreement

If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*

*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.

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