As an investor, you put a lot of faith in the individuals who manage your money on your behalf. You trust that their expertise will leave them to make decisions that will increase your wealth, not endanger it.
Investment fund managers and other financial professionals have a fiduciary duty to their clients to act in the best interest of the individuals who invest in their fund or go through their service. Unfortunately, some financial professionals may violate their fiduciary duty to clients by putting their own profit first or acting in a way that can only be described as grossly negligent.
Some people use their own authority to help friends and family
There are many circumstances in which a conflict of interest results in disappointment or financial devastation for investors. When the person managing an investment fund decides to use the money in the fund to help build up a business in which they have an interest or in which their loved ones do, that is a clear conflict of interest.
If you discover that the investment that ended up losing your money relates to a business operated by a business partner, friend or family member of someone who works at the investment firm, that could be a red flag for a potential breach of fiduciary duty.
Breaches can also stem from a lack of due diligence
Investments, particularly short-term investments like day trading and commodities, can produce a lot of profit in a short amount of time when handled properly. Repeated success can leave some people feeling overconfident in their abilities or the market, which could then lead them to make major mistakes.
If a mistake that substantially decreased the value of your retirement account or investment account stemmed from a total lack of due diligence or similar forms of professional negligence, you may be able to take action against the company or the individual involved.
Whether through negligence or a conflict of interests, when the people that you trust with your money violate their fiduciary duty to you, you have the right under Kentucky law to hold them accountable and potentially seek compensation for the impact of their behavior on your finances.