A financial advisor who develops a close emotional relationship with a client may engage in unethical practices that lead to advisor misconduct or fraud. Although many financial advisors have close professional relationships with their clients without any problems, some advisors develop close personal relationships as a means of deception.
Unethical advisors often manipulate their clients' emotions to persuade them to invest in certain products that increase advisor profits. To prevent potential misconduct and losses, it's important to maintain a professional relationship with a financial advisor. Here are some red flags that may signal the advisor is getting too close for comfort.
Advisors who try to steer clients towards risky investments with enthusiasm may have their own profits in mind, rather than the clients' profits. Investors should be cautious of advisors who seem to be overconfident and make bold predictions, because there is no such thing as a sure thing.
Financial advisors should explain different fee structures related to investments. Fees for management services, investment advice, brokerage costs, and third-party fees are often rolled up in wrap-fees which can cost the investor more than individual fees.
Financial advisors who get too close want to make it more difficult to end the relationship. In such cases, many clients stay with their advisor even when they feel unsatisfied with performance or are otherwise uncomfortable, because they think finding a new advisor will be too hard. In actuality, finding a new advisor is not that difficult.
If you or a loved one has suffered investment losses as the result of investment misconduct, contact a securities fraud lawyer at Meyer Wilson by calling us toll-free at 888-390-6491 to schedule a free case evaluation today.
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