The Fiduciary Duty of Securities Brokers and Investment Advisers: Sole Interest or Best Interest? An Analysis of the Administration's Proposal

2009 ◽  
Author(s):  
Melanie L. Fein
Keyword(s):  
Fiduciary Duty ◽  
Best Interest ◽  
Investment Advisers

Fiduciary Principles in Investment Advice

2019 ◽  
pp. 144-165
Author(s):  
Arthur B. Laby
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Complex Nature ◽  
State Law ◽  
Fiduciary Duties ◽  
Legal Obligations ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Definition Of ◽  
Investment Advice

This chapter examines the fiduciary principles governing investment advice. Fiduciary principles in investment advice are both straightforward and complex. They are straightforward because most investment advisers are considered fiduciaries and subject to strict fiduciary duties under federal and state law. Their complex nature arises from the fact that many individuals and firms provide investment advice but are not deemed investment advisers and, therefore, are not subject to a fiduciary obligation. This chapter first explains whether and when an advisory relationship gives rise to fiduciary duties by focusing on both federal and state law, as well as the individuals and firms that typically provide investment advice. In particular, it looks at certain persons and entities excluded from the definition of investment adviser and thus not subject to the Investment Advisers Act of 1940, namely broker-dealers, banks, and family offices as well as accountants, lawyers, teachers, and engineers. The chapter also considers fiduciaries under ERISA, the Investment Company Act, and the Commodity Exchange Act before discussing the fiduciary duty of loyalty and how it is expressed and applied in investment advisory relationships; the fiduciary duty of care and how it differs from other standards of conduct, such as a duty of suitability; and other legal obligations imposed on investment advisers and how those obligations relate to an adviser’s fiduciary duty. Finally, the mandatory or default terms with regard to an investment adviser’s fiduciary duties are explored, along with remedies available for breach of fiduciary duty.

scholarly journals Fiduciary Law and the Constructive Trust: Perfecting the Fiduciary Undertaking

2012 ◽  
Vol 49 (3) ◽  
pp. 655 ◽  
Author(s):  
Ciara Toole
Keyword(s):  
Supreme Court ◽  
Fiduciary Duty ◽  
Supreme Court Of Canada ◽  
Best Interest ◽  
The Supreme Court ◽  
Fiduciary Obligations ◽  
Breach Of Duty ◽  
Fiduciary Relationships

Two recent unanimous decisions from the Supreme Court of Canada in Galambos v Perez and Alberta v Elder Advocates of Alberta Society have narrowed and refreshed the requirements for recognizing fiduciary relationships and obligations. All fiduciary obligations must be founded by an undertaking, either express or implied, on the part of the fiduciary to act in the best interest of the beneficiary. At the heart of the fiduciary obligation, the undertaking of a fiduciary may also serve as a foundation for the goals of fiduciary accountability. The developing “Galambos approach” remains incomplete in its application in this regard. In the spirit of Galambos and Elder Advocates, I propose that the undertaking of the fiduciary can provide principled guidance in the availability of gain-based relief for breach of fiduciary duty. Particularly, I suggest that the imposition of a constructive trust as proprietary gain-based relief may be rationalized under the objective of perfecting or enforcing the fiduciary undertaking. To demonstrate my proposal, I investigate three example undertakings and breaches of fiduciary duty in which the fiduciary acquires property through the breach of duty. By grounding this overall discussion towards a conceptual remedial goal of enforcing the fiduciary’s undertaking, Galambos may spark the development of a principled approach to understanding both the making and the breach of fiduciary obligations.

5 The Regulatory Duties Arising from the Provision of Investment Advisory and Management Services

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Financial Services ◽  
Public Investment ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Regulatory Regime ◽  
Investment Funds ◽  
Investment Advisers ◽  
The Uk ◽  
Management Services

This chapter examines the regulatory duties of investment managers arising from the provision of investment advisory and management services. Managers of private investment funds that are authorised or regulated as investment advisers or managers can owe regulatory duties arising under the Financial Services and Markets Act 2000 (FSMA) in the UK and the Investment Advisers Act of 1940 in the United States. The chapter begins with a discussion of the UK Financial Conduct Authority’s (FCA) regulation of the conduct of firms authorised under the FSMA, including collective investment schemes, public investment funds, and fiduciary duty in the financial services regulatory regime. It then considers the FCA’s regulatory response to private investment funds as well as the U.S. Securities and Exchange Commission’s compliance programme for investment advisers and managers primarily under the Advisers Act. It concludes with an analysis of financial services regulation of fiduciary duties.

SEC adopts rules and interpretive guidance designed to enhance and clarify the obligations of financial professionals

2019 ◽  
Vol 20 (4) ◽  
pp. 35-44
Author(s):  
Michael R. Rosella ◽  
Vadim Avdeychik ◽  
Justin R. Capozzi
Keyword(s):  
Historical Context ◽  
Legal Counsel ◽  
Legal Analysis ◽  
Best Interest ◽  
Extensive Experience ◽  
Content Type ◽  
The Us ◽  
Investment Advisers ◽  
Definition Of ◽  
Practical Implications

Purpose This article provides an overview of the US Securities and Exchange Commission’s (SEC) recent approval of a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. Design/Methodology/Approach The article provides legal analysis for and historical context of the requirements of the SEC’s adopted rules, Regulation Best Interest and Form CRS in addition to the two separate interpretations under the Investment Advisers Act of 1940, the Standard of Conduct for Investment Advisers; and the Broker-Dealer Exclusion from the Definition of Investment Adviser. Findings The SEC’s adopted regulatory package does not adopt a uniform fiduciary standard for broker-dealers and investment advisers but instead promulgates legal requirements and mandated disclosures in order to conform to the SEC’s perceived expectations for reasonable investors. Practical implications Investment advisers and broker-dealers should consult with their legal counsel in assessing how and to what extent the new regulatory package is applicable to them. Originality/Value This article provides practical guidance from lawyers who have extensive experience with the Investment Company Act, Investment Advisers Act, and the Securities Acts.

scholarly journals Legal risks of using regulatory technologies in business and professional activities

2021 ◽  
Vol 106 ◽  
pp. 02013
Author(s):  
Olga Sushkova
Keyword(s):  
Fiduciary Duty ◽  
Data Governance ◽  
Best Interest ◽  
Fiduciary Duties ◽  
Compliance Costs ◽  
Professional Activities ◽  
Financial Firms ◽  
Legal Risks ◽  
Artificial Intelligence Technology ◽  
And Control

When using artificial intelligence technology in RegTech or SupTech solutions to prevent, detect and control financial crimes such as money laundering, it is necessary to be aware that due to compliance costs, many online financial firms are prohibited from providing financial advice, especially if they process transactions on behalf of clients or provide p2p investment platforms. RegTech streamlines KYC/CDD processes and therefore has the ability to reduce compliance costs. This, in turn, will allow more firms to enter the market to offer services. The regulatory goal of ensuring market integrity directly conflicts with the rights of individuals and the Data Protection Acts. It is argued that data governance will need to be established to protect individual rights and public safety. Furthermore, the question remains unresolved as to whether fiduciary duties can be assumed by robo-advisors or consultants using algorithms. Fiduciary duties may also be modified and limited by the parties. The fiduciary duty concerns what the fiduciary (investment adviser) cannot do (conflict of interest) but should not do (act in the best interest of the client). Consequently, the use of common law principles to protect consumer investors is currently underdeveloped, particularly if the AI seeks to provide access to finance and fill gaps in guidance.

A Roadmap to Medical Professionalism

2021 ◽  
pp. 1-16
Author(s):  
Gia Merlo
Keyword(s):  
Professional Identity ◽  
Identity Formation ◽  
Lifelong Learning ◽  
Medical Profession ◽  
Fiduciary Duty ◽  
Medical Professionalism ◽  
Professional Identity Formation ◽  
Best Interest

Medical professionalism is more than a demonstration of individual competencies. Becoming a member of the medical profession is not only about passing a set of milestones but also about embodying the values, behaviors, and identity of a physician through a process of professional identity formation. The major frameworks for medical professionalism, the process of professionalization, and the importance of socialization in medicine are discussed. The reader is encouraged to reflect on who they are and who they want to become. Thus, this chapter provides a roadmap to medical professionalism. Physicians have a fiduciary duty to act in the best interest of their patients and embrace lifelong learning.

Decoding the SEC rulemaking package on standards of conduct for investment professionals

2018 ◽  
Vol 19 (4) ◽  
pp. 6-12
Author(s):  
Mark M. Attar ◽  
Marguerite Bateman ◽  
Jack P. Drogin ◽  
Domenick Pugliese ◽  
Rachael Leah Schwartz ◽  
...  
Keyword(s):  
Best Interest ◽  
Current Form ◽  
Content Type ◽  
Doing Business ◽  
The Us ◽  
Retail Investors ◽  
Retail Investor ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Proposed Regulation

Purpose To provide an overview of the US Securities and Exchange Commission’s (SEC’s) recently proposed rulemaking package relating to standards of conduct for investment professionals. The three proposals included: interpretation regarding the standard of conduct of investment advisers under the Investment Advisers Act of 1940; Form CRS which both registered investment advisers and registered broker-dealers would have to provide to retail investors; and proposed regulation best interest. Design/methodology/approach Reviews and summarizes the three individual proposals. Findings The SEC has proposed this rulemaking package in order to meet three goals: enhance retail investor protection and decision making, preserve investor choice and cost, and raise retail investor awareness of whether they are doing business with a registered financial professional. The SEC is looking for feedback, particularly from retail investors, on whether these proposals would achieve the SEC’s goals. Originality/value Summarizes the three proposals in a manner that provides insight into how investment advisers and broker-dealers would be required to conduct business with retail investors if the proposals are adopted in the current form.

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