Document Type
Conference Proceeding
Publication Title
PIABA 26th Annual Meeting Materials
Publication Date
2017
Abstract
Investment professionals are subject to varying standards of conduct when providing advice to clients. The standards range from providing advice which is suitable to acting consistently with a fiduciary standard.
The article provides a brief history of the applicable securities statutes governing investment advice. It discusses the differences in the enactment of the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Employee Retirement Income Security Act of 1974.
Next, the article discusses how each statute has impacted the standards applicable to brokers and investment advisers. Investment advisers are deemed fiduciaries. Brokers are held to the “suitability” standard, unless the broker is exercising discretion over client funds or there exist other special circumstances. In those cases, brokers are considered fiduciaries as well. Finally, both investment advisers and brokers may be considered fiduciaries when providing investment advice in connection with retirement assets.
Comments
Available at: https://ssrn.com/abstract=3178326
Reprinted with the permission of Public Investors Arbitration Bar Association (PIABA).