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Brokers Are Liable

Brokers Liability

Stockbrokers and financial planners are required by law to “know their clients” and recommend investments that are appropriate for them. The rules governing brokers require that they have reasonable grounds for believing that every recommendation is suitable for the customer. The broker (often called a “financial consultant”) must obtain information concerning their clients’ financial condition and investment objectives before making a recommendation. Certified Financial Planners are held to even higher standards. For retirees, or people approaching retirement, suitable investments mean conservative investments, where life savings are protected. The investment should earn income for them to live on, through interest and dividends. This is because retirees cannot afford to lose their retirement savings. After a financial consultant invests a client’s money, that advisor should continually monitor the client’s investments and personal situation. Financial advisors are required to warn their clients if the investments are not working out or pose more risks […]

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