Financial Advisor Negligence

Financial advisor negligence refers to conduct that falls below a standard of care established to protect investors against an unreasonable risk of harm. This cause of action is based upon duties owed by the financial advisor to his/her client and the breach of that duty. An example of this cause of action would be a financial advisor who makes investment recommendations outside of the investor’s stated risk tolerance, or investment objective. A basic financial advisor negligence claim relies on proving four elements: duty, breach of duty, causation, and damages. In the context of a financial advisor negligence claim, the focus is typically on the duty the broker owed to his/her clients, whether he/she breached that duty, whether the breach caused the client financial losses, and what damages the client actually suffered.