Needless to say, not all investments are for everybody. A stockbroker may only recommend investments that are suitable for a certain customer. In order to determine the right investment, a broker must consider, among other things, the investor’s:
- Risk tolerance
- Financial knowledge
- Investment horizon
- Investment objectives
- Loss tolerance
In addition to recommending the right investment according to each investor’s profile, a stockbroker must clearly disclose to his or her clients the risks an investment entails. If a broker intentionally or unintentionally fails to make these risks clear to you, he or she might be violating suitability rules, and you might be entitled to compensation.
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If you are facing a legal dispute related to your investments, it’s in your interest to work with an experienced attorney who can provide you with the advice you need to reach a resolution that reflects your interests. The first step is to meet with a lawyer in person so you can learn more about your legal options.