An investment that is unsuitable is one that does not meet the investor’s means or goals. The suitability of an investment depends on the individual investor’s unique situation. For example, the same investments that are appropriate for a person right out of college might not be suitable for a retiree with kids in college.
Brokers may use factors such as age, the overall financial situation of the client, the client’s objectives, timing (how soon the investments need to be converted into cash, etc.), the client’s tax status, other investments the client has, the investor’s experience, and more to determine suitability. Life changes such as getting married, having kids, losing a job, etc., should prompt a reconsideration of what is a suitable investment.
Yes. For example, a high-risk investment strategy would probably not be suitable for a retiree who relies on investment income to live.
Brokers have a duty to recommend suitable investments and investment strategies based on your goals and your individual situation. If a broker or advisor recommended an unsuitable investment, he or she may be liable for your losses. Contact an experienced investor rights attorney to see if you have a case.
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