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  • Congress Drops the "F-Word" (Fiduciary)

    No, you're not going to have to hide this week's E-Letter from the kids. The F-word discussed in today's issue is 'fiduciary.' As you probably know, financial regulatory reform has been getting a lot of attention in the financial press lately. Unfortunately, many investors do not know that a provision to require brokers to act in your best interests rather than their own (a concept known as the 'fiduciary standard') was an early casualty of the financial reform effort, thanks largely to Wall Street's lobbying efforts.

    There are some investment professionals who are bound to exercise fiduciary duty in relation to your investments, while others are held only to the less-stringent 'suitability standard.' However, many investors do not know what a fiduciary standard is, or how the absence of this duty can affect their investments. In this week's E-Letter, I'll compare the two standards as well as fill you in on why the large Wall Street brokerage firms are so opposed to brokers having a fiduciary duty to clients.