If you’re a retiree or nearing retirement, the latest market downturn may have shaken your confidence in your investments. Watching your portfolio take a hit right before retirement is more than frustrating—it can be devastating. At this stage in life, you don’t have decades to recover from financial losses like younger investors do. That’s why your financial advisor likely should have structured your portfolio with a long-term, conservative strategy designed to weather market swings, rather than chase risky stocks that were popular at the time. If this happened to you, you should reach out to a securities law firm, like Malecki Law in New York.
Regulation Best Interest (Reg BI) requires financial professionals to put their clients’ needs above their own. But what happens when an advisor fails to follow that rule? If your portfolio was built around the high-flying stocks of the moment rather than a balanced strategy designed to protect your retirement savings, you may have been a victim of poor financial advice—or even negligence.
Was Your Portfolio Built for Retirement Stability or Speculation?
A well-crafted retirement portfolio should be diversified, meaning your funds are spread across different types of investments to reduce concentration risk. This might include a mix of blue-chip stocks, bonds, mutual funds, and other lower-risk assets designed to generate steady returns over time. Your advisor should have also taken your age, risk tolerance, and long-term financial goals into account when making recommendations.
But some advisors are more focused on commissions than client well-being. If you were heavily invested in high-risk stocks or concentrated in just a few companies—such as the “Magnificent 7” tech stocks (Meta, Amazon, Microsoft, Alphabet, Nvidia, Tesla, and Apple) —you may have been exposed to unnecessary volatility. These stocks soared during market highs, but their decline has left and can leave many investors, including soon-to-be retirees, with major losses. If this sounds all too familiar to you, you need to consult a securities lawyer in New York, like the lawyers at Malecki Law, who can analyze the volatility in your portfolio.
Did Your Financial Advisor Act in Your Best Interest?
Reg BI was designed to prevent advisors from making recommendations based on what benefits them rather than what is best for you. Under this rule, financial professionals are required to:
- Understand your risk tolerance, financial goals, and time horizon before recommending investments
- Ensure investment recommendations align with your best interests rather than their own financial gain
- Disclose conflicts of interest, such as commissions earned from recommending certain products
- Regularly review and adjust portfolios to match changing economic conditions and personal circumstances
If your advisor failed to diversify your investments or put too much of your retirement savings into high-risk stocks without fully disclosing and explaining the associated risks, they may not have followed these requirements. You could have a free consultation with securities attorneys at Malecki Law, so they can review your situation to determine whether you have a viable claim.
What Can You Do If You Lost Money in the Market?
If your retirement portfolio took a major hit, you may still have options to recover some of your losses. A careful review of your investment history can determine whether your advisor followed their legal and ethical obligations. Signs of poor financial advice include:
- Overconcentration in risky investments
- Failure to explain potential risks and downside exposure
- Ignoring your stated risk tolerance and financial needs
- Encouraging frequent trading to generate commissions
- Recommending investments that benefited them more than you
Have an Experienced Securities Lawyer Review Your Account Statements for Signs of Impropriety
At Malecki Law, we help investors assess their financial losses and hold advisors accountable when they fail to act in their clients’ best interests. If you lost a significant portion of your retirement savings due to poor investment advice, contact Malecki Law at (212) 943-1233 for a free consultation. You worked hard for your money—let’s make sure it was managed properly.