Believe it
or not, your trusted financial adviser is only human. He or she can make a very
costly mistake despite his or her best intentions. Perhaps you have taken
comfort in the fact that your adviser, whether a registered representative or
an investment adviser representative, has a company with whom they are
affiliated. Surely the company has insurance, right? Well, I have more bad news
for you – that company might not have an errors and omissions policy either,
particularly if they are a small outfit.
Our advice is that you ask to
receive a copy of your advisor’s policy at the beginning of your relationship.
If your advisor does commit a negligent or even fraudulent act – consult with
an attorney experienced in such matters. You may wish to confirm that an
insurance policy is in place before you proceed with expensive litigation. And
if you are an uninsured adviser that made a mistake, you should seek legal
counsel immediately. Food for thought.
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