Over Concentration Investment

Over concentration investment can exist by investing an inappropriate portion of a client’s assets in one security, one sector, one industry or one type of investment product. The failure to properly diversify an investment portfolio can create unnecessary risk for the client and is referred to as over concentration investment. Although diversification in itself does not guarantee profits, or completely protect against loss, a diversified portfolio controls risk and helps to avoid potential loss to the client. The failure to diversify an over concentrated portfolio, or the negligent recommendation of a concentrated portfolio, may be improper and may create a viable cause of action against your financial advisor for any losses you may have suffered.