Recently, nine well-known brokerage firms were accused by the Public Investors Arbitration Bar Association (PIABA) of incorrectly casting the impression that investment advisors had fiduciary duties to the investors.
According to the PIABA, customers lose more than $17 billion a year as a result of improper advice given by the brokerage firms. The PIABA claims that while these firms advertise themselves as looking out for investors’ interests, they are actually looking out for their own interests, which results in conflicted advice and significant losses for investors.
The takeaway for businesses is to be careful what impressions are cast with consumers. If consumers think that a business is looking out for them, a fiduciary duty may be created, which could result in increased liability, should something go wrong. For a copy of PIABA’s report, click here.
