i. advice about market trends is advice about securities;
ii. advice about the selection and retention of other advisers is advice about securities;
iii. advice about the advantages of investing in securities versus other types of investments (e.g., coins or real estate) is advice about securities;
iv. providing a selective list of securities is advice about securities even if no advice is provided as to any one security; and
v. asset allocation advice is advice about securities
As advisors, we are subject to a fiduciary standard that includes
Duty Of Care. Fiduciaries have a Duty of Care to their clients (in addition to a Duty of Loyalty) that they actually take steps to ensure that the advice they’re providing for their clients actually is the right and proper advice, which would include:
• Duty To Provide Best Interests Advice. When providing personalized investment advice, the investment advisor would have a duty to make a reasonable inquiry into the client’s financial situation, level of financial sophistication, investment experience, and investment objectives, beyond making a recommendation (with the breadth of diligence based on the breadth and scope of the advice engagement).
• Duty To Seek Best Execution. To the extent that the investment advisor manages the client’s portfolio and has a duty to select broker-dealers for execution and actually facilitate execution of client trades (e.g., with discretionary accounts), the RIA has a duty to seek best execution for those client transactions.
• Duty To Act And To Provide Advice And Monitoring Over The Course Of The Relationship. Once an advisor provides advice, they have a duty to follow through and subsequently monitor the implementation of that advice (e.g., to monitor a portfolio over which they have discretionary management), although to the extent that the scope of the relationship is limited (e.g., to a one-time financial plan), the scope of monitoring would be limited to the duration of the actual (limited) relationship.