disclosed against Kearney’s own. The
jury cleared Kearney, and the Vargases are appealing the verdict.
California is one of a handful of
states in which broker-dealers have
a fiduciary duty. Elsewhere federally
registered investment advisers are
fiduciaries, but broker-dealers aren’t.
Muddying even this double standard,
“many investment pros wear both
hats,” says Tom Selman, executive
vice president of FINRA, the Financial Industry Regulatory Authority,
which helps oversee broker-dealers.
This leaves consumers to wonder,
When is my trusted adviser not
A coalition of groups representing
financial planners and investment advisers says it’s time to retire that riddle.
These groups would like a fiduciary
duty to apply anytime any financial
professional gives advice. Congress
is considering a uniform standard; it
remains to be seen whether this standard will match the rigors of fiduciary
duty or get watered down. • HOW TO PROTECT YOURSELF NOW
Investment peddlers often use high-pressure tactics that may start with a
pitch at a free lunch or dinner seminar.
To avoid investing in something that’s
inappropriate for you or too costly:
Be patient Don’t get pressured into
signing any documents without taking
the time to think about the investment
and getting a second opinion from a
trusted friend, adviser, or lawyer.
Be informed Consider hiring a certified financial planner who is bound by
a code of ethics to guide you objectively; then, purchase any recommended
Be prepared AARP and FINRA have
developed a list of questions you
should always ask before investing.
See aarp.org/nofreelunch and click on
“Free Lunch Seminars: Questions to
Ask a Financial Professional.” ;
Contributing editor Ron Burley is the
author of Unscrewed: The Consumer’s
Guide to Getting What You Paid For.
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