Stock Brokers as Advisers

New SEC regulations want to see that stock brokers will have to treat their clients differently than in the past, if they already do not.

Of course it won’t do much for most investment portfolios, but it will make bureaucrats feel better.

In the old days a broker had to be sure that an investment was ”suitable” for a client. What was suitable was often debatable, but that is what makes securities markets as erratic as they are.

Now the broker is supposed to have a “fiduciary duty” toward the client. according to SEC intentions. That should open a hornet’s nest of endless legal problems.

The main result of this is to give investors more ammunition to sue brokers for real or imagined damages. That offers more power to the lawyers. And to give brokers the excuse to become more profitable "advisers."