SEC regulations want to see that stock brokers 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 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.”(See the Earl J. Weinreb NewsHole® comments and
@BusinessNewHole tweets.)
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