In many cases, small investment advisers do not possess enough capital or insurance to compensate clients when its advisers have wronged investors. Those advisers often operate from small offices that lack constant oversight from financial regulators. In fact, those money managers are 1.5 times as likely to file for bankruptcy within a year of a legal settlement resulting from a client dispute. Additionally, these same advisers are 3 times more likely to retain an unpaid judgement on its record.
