In this second part series of columns about the legal duties of broker-dealers, Tamar Frankel, the Robert B. Kent Professor of Law at Boston University School of Law, considers the significance of specific words in the context of broker-dealers and their clients and discusses the legal consequences of using certain words over others. Specifically, Frankel clarifies that financial securities are not “products” and the servicers are not an “industry”; rather, brokers are agents providing services, and explains why broker-dealers should owe a fiduciary duty to their clients, who entrust their money—and sometimes their life’s savings—to them.
Boston University law professor Tamar Frankel comments on the current situation regarding federal regulation of securities brokers as having fiduciary duties to their clients. Frankel explains the arguments for and against such regulations and describes the possible consequences for retirees, young people, and the brokers themselves if the regulations are imposed.
Boston University law professor Tamar Frankel comments on the increased use in “robo-advisers”—machines that purport to offer investment advice and order the performance of their advice by securities trades. Frankel describes how the Securities and Exchange Commission has responded to the rise in robo-advisers and summarizes some of the legal challenges they present, particularly when used by brokers and by financial advisers.