Risk Tolerance Abuses
Think risk suitability when evaluating a tolerance abuse claim. The agencies that regulate stockbrokers and financial advisors in Boca Raton, Fort Lauderdale, and West Palm Beach Florida require that in recommending to an investor to purchase, sale or exchange of any security, the financial professional must have reasonable grounds to believe that their recommendation is suitable. Suitability of investments goes directly towards the risk tolerance of the investor and can be proven, or disproven based on the portfolio of securities and holdings of that individual investor. A stockbroker who fails to consider the customer's financial status, the tax consequences on an individualized basis, investor objectives, and their risk tolerance toward risk-averse status, may well run afoul of the suitability, or risk tolerance abuse test. Risk tolerance abuse cases are often filed by family members when a senior family member has been exposed to losses due to the nature and scope of the investments in their portfolio. Keep in mind that the two most important considerations in the suitability or risk tolerance abuse situation are the customer's capability to evaluate investment risk and the question of to what extent the individual judgment of the investor has been overtaken by the financial professional. Family members, retirees and parent elders only become claimants when something goes amiss. Risk tolerance abuses are most common where investor populations are more toward the top retiree income earners and less populated by aggressive midlife investors. Stockbrokers in South Florida, Fort Lauderdale, Boca Raton, Palm Beach, have very high concentrations of retirees with inherently low risk tolerance. Many of these risk tolerance abuse claims, out of South Florida most commonly occur when returns in the bond market are low and volatility is high in securities trading. Practitioners in the stockbroker fraud area see the cyclical nature of these claims which track almost perfectly with the interest returns of bond portfolio managers and the volatility of stocks. Risk tolerance abuses and suitability claims arise in all areas of all investors. If you believe you, or family member, has been exposed to stock broker abuses by the inclusion of unsuitable investments contact a South Florida securities fraud attorney.