Breach of Fiduciary Duty
Having a fiduciary duty means putting the client’s interests first. Stockbrokers sometimes have a fiduciary duty; registered investment advisors always owe clients such a duty. Fiduciary duty has two parts: 1) a duty of loyalty, which involves acting in the customer’s best interest and eliminating or disclosing all conflicts of interest; and 2) a duty of care, which includes providing suitable investment advice and frequently involves ongoing responsibility to both monitor the client’s account and recommend changes, as appropriate, to the client’s investment holdings.
An investment advisors fiduciary duty can be breached in many ways. One common breach involves “reverse churning” – the charging of management fees on inactive accounts or on long-term assets that need no “management.” A breach of fiduciary duty can also involve the recommendation of a mutual fund that funnels fees back to the advisor and the providing of investment advice which is not suitable given the customer’s risk tolerance, objectives, and financial needs.
If you have lost money because your stockbroker or investment advisor has breached his/her fiduciary duties to you, we would like to help. Contact The Prosser Law Firm for a free, informative consultation at 901-820-4433.