Bloomberg recently reported about the results from a new survey which revealed that most investors mistakenly believe brokers have to uphold a fiduciary duty to their clients. The survey was conducted by a coalition of consumer groups which included the Consumer Federation of America, AARP and North American Securities Administrators Association. While most of the investors surveyed supported a fiduciary standard for all investment professionals that provide advice, many were unaware that brokers and “financial advisors” who work at major brokerage firms do not have to uphold a fiduciary duty. While brokers must offer their clients “suitable investments, most registered investments advisors have a fiduciary obligation to put their clients’ best interest first.

Highlights from the survey:

“Seventy-six percent of investors said financial advisers, a term used by major brokerage firms such as Bank of America Corps Merrill Lynch to describe their salespeople, must uphold a fiduciary duty to their customers, according to the survey… Brokers currently must meet a standard to offer clients suitable investments,whereas most registered investment advisers have a fiduciary obligation to put clients best interests first. Seventy-seven percent of investors knew that investment advisers have to abide by a fiduciary standard” 

“Ninety-seven percent of survey respondents said they support a fiduciary standard for investment professionals providing advice, including requiring disclosure of any fees or commissions they may earn and any conflicts of interest that could potentially influence their advice.”

 “Sixty percent of respondents said they thought insurance agents had to uphold a fiduciary duty, which isn’t true. That compares to 96 percent who said the fiduciary requirement should extend to insurance agents giving investment advice, including selling annuities.”