Claims allege unsuitable investment recommendations given the client's objectives and risk tolerance, unauthorized transactions, excessive trading, failure to diversify, and misrepresentation of investment characteristics.
Registered investment advisors owe fiduciary duties, while broker-dealers are subject to a best interest standard.
Alternative Names:
Investment Advisor Liability, Broker-Dealer Liability
Why it Matters?
The distinction between fiduciary and best interest standards determines what the claimant must prove and remains a live regulatory question. Most retail disputes proceed in FINRA arbitration rather than court, which changes discovery scope, the availability of dispositive motions, and appellate review substantially. Suitability claims turn on the documented client profile, which makes account opening records central.
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Frequently asked questions
What standard applies to financial professionals?
Where are these disputes resolved?
