The Fiduciary Obligations of Financial Advisors Under the Law of Agency
TLDR
In this paper, the authors consider how agency fiduciary law might be applied to a financial advisor with discretionary trading authority over a client's account, including principal trades and the role of informed consent by the client.Abstract:
This paper considers how agency fiduciary law might be applied to a financial advisor with discretionary trading authority over a client's account. It (i) surveys the agency problem to which the fiduciary obligation is directed; (ii) examines the legal context by considering how the fiduciary obligation undertakes to mitigate this problem; and (iii) examines several potential applications of agency fiduciary law to financial advisors, including principal trades and the role of informed consent by the client, organizing the discussion under the great fiduciary rubrics of loyalty and care. This paper was sponsored by Federated Investors, Inc.read more
Citations
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Legitimacy of the current Australian Financial Services licensee-authorised representative licensing model: theory and Australian empirical evidence
TL;DR: In this article, the authors argue that licensing financial advisers through third-party, often commercially-driven product-conflicted, institutional licensees threatens independence and raises conflicts of interest.
Journal ArticleDOI
"The Prudent Investor Rule and Market Risk: An Empirical Analysis"
TL;DR: This article examined trustee management of market risk before and after the fiduciary investment law and found that the reform increased stock holdings only among banks with average trust account sizes above the 25th percentile.
Journal ArticleDOI
The Prudent Investor Rule and Market Risk: An Empirical Analysis
TL;DR: This paper examined asset allocation and management of market risk before and after the fiduciary income tax reform and found that the move toward additional stockholdings was correlated with trust risk tolerance, and that the increased market risk exposure from additional stock holdings was more actively managed.
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Household choices on investing in financial risky assets: Do national institutional factors have their own merit?
Nicholas Apergis,Christos Bouras +1 more
Book
Investment Professionals and Fiduciary Duties
TL;DR: In this article, a review of market history, literature, and general principles from fiduciary relationships, some simple concepts emerge that could help investment professionals navigate the conflicts of interest that are inevitable given the often blended roles that they play in financial markets.
References
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Journal ArticleDOI
The Economic Structure of Fiduciary Law
TL;DR: This article revisited the economic theory of fiduciary law and provided an updated and accessible synthesis of the law-and-economics theory of law and legal institutions in an updated manner.
The Uniform Prudent Investor Act and the Future of Trust Investing
TL;DR: The Uniform Prudent Investor Act (UPA) as mentioned in this paper is an extension of the Restatement of Trusts (ROT) of 1987, which has been revised several times over the years.
Posted Content
Fiduciary Obligations of Broker-Dealers and Investment Advisers
TL;DR: In this paper, the authors argue that the broker-dealer exclusion in the Investment Advisers Act has outlived its usefulness and that a fiduciary obligation should be imposed, albeit cautiously, on brokers that provide advice.
Posted Content
Did Reform of Prudent Trust Investment Laws Change Trust Portfolio Allocation
TL;DR: In this paper, the effect of changes in state prudent trust investment laws on asset allocation in noncommercial trusts was investigated and it was found that institutional trustees held about 1.5-4.5 percentage points more stock at the expense of "safe" investments.