Lost Money in Structured Products?
If your financial advisor sold you a complex structured product that resulted in significant losses, you might be entitled to compensation. These investments are often unsuitable for average investors, yet brokers continue to sell them due to high commission payouts.
What Are Structured Products?
Structured products are complex investment vehicles tied to underlying assets like stocks, bonds, commodities, or currencies. While legal and SEC-registered, they involve intricate formulas that most retail investors cannot understand nor are they adequately or accurately explained by financial advisors. Key characteristics include:
- Fixed maturity dates (6 months to 12 years)
- Complex risk-return calculations
- Limited liquidity
- High advisor commissions (3-4%)
Common Types of Structured Products
Market-Linked Notes: Offer principal protection tied to asset performance but lack FDIC insurance and carry high risks.
Steepener Notes: Long-term investments (often 20+ years) with attractive initial rates that typically disappoint over time.
Structured CDs: Certificates of deposit with reduced liquidity and complex payout calculations.
Auto-Call Notes: Offer high initial returns but can be redeemed early by issuers when profitable, leaving investors with losses when underlying assets fall below certain thresholds.
Why Brokers Push These Products
Financial advisors earn substantial commissions (3-4%) on structured product sales, creating conflicts of interest. Unfortunately, what’s profitable for advisors isn’t always suitable for clients, especially those with:
- Low risk tolerance
- Need for liquidity
- Limited investment experience or understanding
- Retirement goals
Red Flags: When to Consider Legal Action
You may have grounds for a claim if your advisor:
- Failed to explain the investment’s risks and complexity
- Recommended unsuitable products for your risk profile
- Provided misleading information about potential returns
- Prioritized their commission over your financial goals
- Neglected proper due diligence on the product
Why You Need an Experienced Attorney
While you can represent yourself, brokerages will have teams of specialized attorneys. The complexity of structured products and securities law makes professional representation crucial for:
- Building a strong case
- Navigating FINRA procedures
- Identifying specific regulatory violations
- Maximizing your recovery potential
Get Help Today
At the Law Office of Leo Peraza, P.A. we have over a decade of experience navigating these cases. We offer free consultations and are available seven days a week to evaluate your case.
Don’t let broker negligence or fraud cost you your financial future. If you lost money on an improperly sold structured product, contact us today to discuss your legal options.