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When reviewing your account statements, trade confirmations, or online account, look out for these red flags that may indicate excessive trading:
Be aware that excessive trading can occur even if the overall account value increases. Also, remember that your account statements, trade confirmations and online account do not disclose all fees — you can find more information by asking your broker. If you do not understand the reason for a trade or the reason for a fee, contact your broker and ask about it.Communicating Your Investment Goals to Your Broker
When you open a brokerage account, your broker should ask you to specify your overall investment goals (or “investment objectives”) and how much risk you are willing to tolerate. Different firms use different terms to describe investment objectives or risk-tolerance levels. Some common terms are: “capital preservation,” “income,” “growth,” “moderately aggressive,” “aggressive growth,” and “speculation.” Make sure that you understand what these terms mean and that you know what you communicated to your broker.What Should I Do if I am Informed of a High Volume of Trade Activity in My Account?
If your brokerage account has a high volume of trade activity, your brokerage firm may contact you and ask you to acknowledge the trading or to confirm that you are satisfied with how your broker is handling your account. If you receive such notification, you should ask your broker to explain:
Once you have this information, you may want to speak with the broker’s manager or the firm’s compliance department to understand and to question the nature of the trading in your account in light of your investment goals and risk tolerance.What Should I Do if I Believe There has Been Excessive Trading in my Account?
Immediately contact a qualified professional.
Please keep in mind that the information contained herein is for educational purposes only. Thus, it is not complete in all material respects.Contact Us
With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as foreign individuals whoinvested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.