Matching Investments with Goals

Nothing can be more financially and emotionally devastating in your retirement years than to experience large losses in your retirement investment account. Since social security alone is often not enough, many retirees depend on their retirement investments to help support them through their golden years.

Many investors do not realize that investment firms and those selling investments can be held liable for investors’ losses when they fail to carry out their responsibilities. These financial advisers and the companies they work for are obligated to follow specific rules and regulations in the securities industry.

New Account/Client Profile Forms

It is crucial that information on New Account/Client Profile forms is accurate and current. Too often, investors sign these forms without adequately reviewing them with their financial adviser or they even sign blank forms allowing the financial adviser to complete the forms. If you do not have a copy of these forms ask your financial adviser for a copy and review them carefully to make sure the information is complete, accurate and current.

These forms are important because they include information about you such as your investment objective, risk tolerance, income and net worth. This information provides a roadmap for you and your financial adviser regarding the types of investments that are suitable for your retirement account. Make sure you understand the investment objective and risk tolerance levels checked on these forms. They should match your true investment goals.

These steps should help prevent your financial adviser from recommending unsuitable investments. Unsuitable investments are investments that do not match your investment objective and risk tolerance. If you do end up with investments in your retirement account that are not appropriate, having accurate information on these forms will help support the claim that unsuitable investments were sold to you by your financial adviser.

Mr. Bingham is an Arizona Licensed Attorney, former Attorney with the Securities Division of the Arizona Corporation Commission and a member of the Public Investors Arbitration Bar Association which is a national bar association committed to representing investors in disputes with the securities industry. He can be reached at (480) 832-1922.