Explanation of Risks
You can only make informed decisions if the details of your investment options are fully outlined by your financial advisor.
To protect you from unnecessary risks, financial advisors must:
- make sure you understand the limitations of their planning
- present, in detail, the benefits of what they recommend and any suitable alternatives
- give full disclosure of the risks of both what they recommend and any alternatives
The most common problem we see in our work to recover financial losses of investors is the failure of a financial advisor to explain risks in a clear and understandable way. Many advisors will paint a rosy picture of potential returns to the investor, without fully explaining the likelihood of a loss or the potential size of the loss. The fact is that the potential gain in an investment always coincides with the potential loss. In other words, the higher the possible profit, the higher the possible loss and the greater the likelihood of sustaining that loss.
If your financial advisor failed to fully explain the likelihood and potential size of losses you might incur on high-risk investments, contact us to see if you have a cause to sue.