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A reader of my blogs sent me an e-mail with a Customer Agreement from a major brokerage firm. She asked me to look it over and tell her if she should sign it. The first thing that struck me was this clause: “Brokerage activities are regulated under different laws and rules than advisory activities and generally do not give rise to the fiduciary duties that an investment adviser has to its clients.” The agreement pointed out that the brokerage firm “…may face certain conflicts of interest and as such, its interests may differ from yours.” These statements are typically inserted in account opening agreements. I asked the reader this question: Why would you entrust your assets to a firm that tells you it does not have to act in your best interests and further that it may have conflicts of interest with you which it will resolve in its favor?
See the original post here:
Dan Solin: Why Don’t You Just Give Your Broker a Gun and Tell Him to Shoot You?
