Arbitrators, Litigators & Fiduciary Imitators

Legal Claims Against Financial Advisers & Insurance Agents

Honestly, how many consumers can read their homeowner’s policy? And even if they did, do they understand it? You would think by now insurance companies would routinely hand the policy owner a summary statement of benefits or some type of crib sheet of contractual imperatives. And if these carriers are thinking about providing disclosure, why can’t it be in the language of the consumer?

For all the disclosures, disclaimers and caveats that are published by insurance companies and even investment houses, certain contractual semantics heavily favor the institutions, not the consumer or investor. Bottom line Joe Public doesn’t have a chance unless he/she litigates through arbitration or, God forbid, take their agent or adviser to court.

In recent years, a rash of fake fiduciaries, which in the end are just insurance agents, financial advisers and money professionals, may not meet the standards of a fiduciary and shouldn’t be holding themselves out as one. When the public thinks of financial fiduciaries, they list CPAs, attorneys or trust officers. Even fee based registered investment advisers make the list by offering fee only – no commission products. Now this is not to say the others couldn’t attain to a fiduciary status, but in arbitration those who hold themselves out as fiduciaries and fail the definition, are opening themselves to greater scrutiny, especially if their online bios tout an area of expertise.

Legal claims could center on the marketing approach the individual or firm uses in the public domain like ‘retirement expert’ or ‘top money manager’. If things go awry for the consumer or investor, their advocates will look to the advertising and other slogans in media and online for evidence to label the actions of the financial professional as ineptness to outright fraud.  That’s not even incorporating errors and omissions that seem to occur with a great degree of frequency.

It’s better to promote your services with a bit of humility, rather than billboard bravado. Most financial professionals are not ready to give creditable evidence to support their advertising claims in the public domain.