Q: I've heard the rules are changing in protecting
me against bad investments and what a broker has to tell me - is that true?
A: There are rules in place protecting you against bad or unsuitable investments. FINRA suitability rules for instance require that any investment recommendation made by a broker to an investor must be in line with investors stated financial profile and objectives. What I think you might be referencing in terms of a rule change or what a broker has to tell you is the Department of Labor (DOL) Fiduciary Rule which was recently overturned by a Federal Court and is no longer being pushed by the Trump Administration. The DOL Fiduciary Rule may no longer be in place at the federal level but this doesn't necessarily limit what disclosers your broker has to make to you. Much will depend on where you are investing and if the firm has internal regulations still in place requiring certain disclosures to be made such as fees on certain products or material market events concerning securities in your account. Where you live and state securities regulations are also an important consideration. Whether you have a discretionary investment account or a commission based account is of great importance as well. Bottom line is what your broker has a duty to divulge is a fact sensitive inquiry. Much will depend on your investment profile and relationship with your broker or investment advisor in determining what has to be disclosed.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
