From the May 2007 issue of Investment Advisor • Subscribe!

The Original SEC Rule

More On Legal & Compliance

from The Advisor's Professional Library
  • Suitability and Fiduciary Duty Recommending suitable investments is more than just a regulatory obligation.  Many investors bring cases claiming lack of suitability, so RIAs must continuously put the onus on clients to notify the advisor of changes in their financial situation.  
  • Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
Download a copy of the Security and Exchange Commission's original decision on the broker/dealer exemption rule exempting brokers from regulation as an investment advisor even when they were being paid fees for investment advice.
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