Breach of Fiduciary Duty
Although investing involves buying and selling, it’s much different than a typical retail transaction. If, for example, you go to buy a car, the goal of the salesperson at the dealership is to get you to leave the lot in one of their cars. What happens after that is not really their concern.
When it comes to investments, the person managing your money has an obligation to look out for you and your best interests. They should know your financial situation and what you hope to accomplish and then put together the right strategy. This is their fiduciary duty.
The Securities and Exchange Commission (SEC) and the Department of Labor (DOL) are working to create a fiduciary standard for brokers and financial advisors. Right now registered advisors have both a suitability and fiduciary obligation, while brokers only have to adhere to the former. This means that brokers don’t only have to recommend the best investments as long as they coincide with an investor’s profile.
The current system can be confusing to investors. In addition to determining which investments to make, they also need to think about levels of protection.
Says the SEC: “Investors may even face these decisions when seeking the same advice from the same institution and the same professional, depending on whether they have a brokerage or advisory relationship. This creates unnecessary risk and complexity for investors by placing the burden on them to understand regulatory differences and to make rational economic decisions in the face of those differences.”
Even without a uniform policy, all financial professionals are required to live up to their responsibilities. If breach of fiduciary duty is suspected, this can result in FINRA arbitration. Through the arbitration process, investors have the opportunity to reclaim lost money.
If you think your broker or financial advisor was in breach of their fiduciary duty, contact the Silver Law Group. An experienced elder fraud attorney will talk to you about your rights and explain how arbitration works. You can call us toll-free at 1-800-975-4345 or just send a message through our online form. The Sliver Law Group works on contingency, so you won’t owe us anything if you don’t recover money.