signs of investment fraud

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The best investment advice depends on YOUR circumstances like age, health, finances, and job status. What is best for your friends and family isn't necessarily what's best for you. Your advisor has a legal duty to recommend investments based  on YOUR personal situation. Failure to do so can lead to an investor claim.

Brokerage houses and banks have a duty to supervise their financial advisors and registered representatives.  When their employees are guilty of negligence or fraud, the company is liable too. In fact, they carry insurance to cover the costs of their liabilities.

Sometimes it takes a major loss to realize your investment wasn't safe and conservative. Rapid changes in value - up or down - can be signs that your investment actually exposed you to high risk of unrecoverable losses. If your advisor told you that your investments were safe, then blamed the market for a dramatic  loss, your advisor might be negligent or commiting investment fraud.

An advisor might recommend different investment products (stocks, mutual funds, etc.) in order to "diversify" a client's investments, but if most of those products are in one sector - like energy or healthcare - a crisis in a single industry can destroy a client's whole portfolio. Advisors and their companies can be liable for failing to diversify your investments.

Advisors sometimes wear two hats. They can also be salespeople who can charge big fees and earn high commissions by selling riskier products. They have a duty to inform you of their personal interests in the investments they recommend, but they don't always admit it or explain it properly. Even then, their conflicting interests can result in them selling you products that aren't suitable or appropriate for you.