Posted in: FINRA | Arbitrations | Greedy Brokers | Breach of Fiduciary Duty |
FINRA just released their stockbroker arbitration statistics for 2009, which has a 43% increase in new arbitration cases filed in 2009, or 7,137 cases.
The number of complaints went up in nearly every category, Reuters reported, including nearly triple the number of cases involving variable annuities. For each arbitration case filed, plaintiffs can cite up to four kinds of broker wrong-doing.
The most common complaint, with 4,206 claims, was breach of fiduciary duty. In its Investor Protection Act bill, Congress is currently debating whether to include a universal fiduciary standard for anyone who dispensed financial advice.
Currently, brokers are only required to advise clients on “suitable” investments, even if the broker receives high commissions and other benefits as the result of the transaction. If held up to the same standard as financial advisers, they would be forced to put the customer’s interest first.
Whether one agrees or disagrees with FINRA’s disciplinary policies over the past few years, these statistics clearly indicate where to make improvements.
