August 5, 2010
Fiduciary Responsibilities imposed upon financial advisors will lead to a feast by malpractice hungry attorneys.
A financial advisor cann't win. If a client suffers losses in the market an attorney could always claim that an advisor steered the client in the wrong direction and build a backward looking case asking if a multiplicty of scenarios were shown to the client. An advisor could never time or out guess the market on the downside.
On the contrary, an advisor could never out guess the market on the upside. If an advisor were to advise his/her client too conservatively and the market exceeded the clients actual gains, once again a malpractice attorney could use the same logic in reverse. Why did my client not benefit from a greater gain.
This legislation will drive out the very best and most honest advisors from the market. Those who are not above board for the most part get away with avoiding compliance issues anyway.
More government equals less protection for the client. The perfect example is the perfect storm that none of our legislators saw coming, nor did the Federal Reserve, Rating Agencies, etc., etc.
So lets start from the begining. Enforce the standards that are already in place a increase the enforcement of existing legislation.