Call Now For a Free Consultation:
(614) 502-6165

Is Your Financial Advisor Committing Malpractice?

When a financial advisor's behavior falls below the accepted standard of practice in the financial services industry, he/she may be committing financial malpractice, a form of professional negligence that can cause significant financial harm to an investor.

What is Financial Malpractice?

Malpractice in any form is defined as improper, negligent, or illegal professional conduct or activity. While most cases of malpractice are focused on legal and medical industries, financial malpractice is a growing concern in the financial services industry. Financial professionals and advisors owe a duty of care to their clients who entrust them with their money for safe investments. Financial advisors must comply with ethical conduct and practices that protect a client's investments, putting their client's best interest above their own. The investment fraud attorneys at Meyer Wilson commonly see cases of financial malpractice and negligence. Common forms of financial malpractice include:

  • Failing to make investment recommendations based on the client's best interest
  • Making misleading or false statements
  • Failing to execute transactions or trades as ordered
  • Failing to advise clients of conflicts of interest
  • Charging excessive fees
  • Committing investment fraud or theft

Some financial advisors try to sway a client's investment decisions based on their own best interest, rather than the client's best interest. Examples of this often include suggesting that a client use the equity in their home to buy life insurance, recommending a fixed indexed annuity without knowing anything about the client, and excessive trading. In such cases, a financial advisor's main interest is making more commission, rather than protecting their client's investments. Financial advisors who don't know or care about their clients' financial standing and investment abilities cost clients significant financial losses.

To avoid financial hardship and losses, investors should watch for red flags that may signal financial malpractice. A professional financial planner will ask lots of questions about a client's income, assets, debts, and financial abilities to invest. Diversification is a basic fundamental principle of any investment portfolio. Investors should be wary of advisors who recommend putting all funds into one investment. This is a red flag that means the investor is focused on his/her commissions, rather than the client's investments.

Financial malpractice often results in investor claims and FINRA arbitration claims filed by investment fraud attorneys on behalf of the client.

Need legal help? Contact our experienced attorneys today.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation

Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
6140 Parkland Blvd.,
Suite 330
Mayfield Heights, OH 44124
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
Follow Us
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram