Mutual Funds

Mutual Funds

One of the most valuable financial tools for investors is a mutual fund. Mutual funds allow investors to pool their money and then as a group invest in assets, stocks, or bonds. Fund managers are responsible for managing and investing this money in a responsible and appropriate way. Top-notch fund managers have the ability to build mutual funds into successful wealth portfolios.

Mutual Fund Fraud

Stockbrokers and fund managers have to invest wisely in order to make money, but also must be honest about their transaction. Breakpoint fraud is a common occurrence when it comes to broker/client relations. Breakpoint fraud happens when a broker misleads a client into think that investment is beneficial when in reality it is a dishonest scheme to increase commission. For example, a broker might convince a client to invest in multiple, smaller funds so they can get a commission per each fund. If the investor conceals other, more advantageous investments without the client knowing, it is considered fraud.

Deceitful brokers or advisors might convince a client to invest in high-cost funds due to commission rates. These commissions can be beneficial for the broker, but may not lead to higher returns for the client.

Mutual fund fraud is more common than you think. In order to protect your investments and collective mutual fund, one must seek out a reputable advisor. In order to create a lawful and successful transaction, advisors must act according to fiduciary duty.


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