Stockbrokers Duties to Clients

What Clients Need to Know About Stockbrokers

Stockbrokers duties to clients and brokerage firms

Stockbrokers owe the following duties to their clients:

• To recommend suitable investments
• To put client interests before their own
• To disclose all important facts and to not misrepresent important facts about proposed investments
• To transact business only after receiving client authorization

Failing to meet these duties is stockbroker misconduct, and it can have devastating financial consequences for investors.

If you believe that you have been the victim of stockbroker misconduct or fraud, you may be able to seek the recovery of your investment losses securities arbitration. The securities attorneys at Dimond, Kaplan & Rothstein, P.A. have the investment knowledge and legal experience to help you understand whether wrongdoing caused your investment losses.

Our securities lawyers help investors recover investment losses by holding brokers and brokerage firms accountable for their negligent or fraudulent investment practices. Contact us for a free consultation.

A Few Things to Know About Stockbrokers Duties to clients Before You Entrust Your Money to One

Many investors believe that stockbrokers are highly trained in finance and investment portfolio management. Most stockbrokers are merely salespeople trained to sell investments over the telephone and to convince people to send their money to the broker. Brokerage firms provide little if any investment management training.

Stockbroker requirements are minimal. FINRA does not even require that stockbrokers have a high school diploma. Brokers must pass a 260-question, multiple-choice test by answering 70% or more of the questions correctly. Some states also have a licensing exam. Once an applicant passes the FINRA exam and any necessary state licensing exam, a criminal background check if performed. If no felony charges are discovered, the applicant becomes a registered stockbroker.

Another area of investor confusion regards broker titles. Many stockbrokers hold titles such as “vice president.” These titles generally have no relation to a broker’s expertise, longevity in the industry, or quality of investment advice. They are given to brokers who generate certain levels of commissions for the brokerage firm.

Advocating for Maximum Recovery of Your Investment Losses

For a free initial consultation about whether stockbroker and brokerage firm misconduct caused your investment losses, contact a securities fraud lawyer at Dimond Kaplan & Rothstein. We represent investors in Florida, California, New York, and nationwide. Call 888.578.6255 to discuss your claim.