Posts Tagged ‘transaction’
Should you become an expert before you know properly handle your PEA or contract of life insurance? Is it reserved for a privileged few you do not belong? If you’ve never owned such financial products, their apparent complexity can make you afraid to lose money simply through ignorance. How to place your orders on your future PEA or life insurance? Lorenzo, whom I thank, asked through a recent comment “Is that going-her orders by internet, or should we call or contact his bank? “. Here behind the scenes, to purchase with full knowledge of cause and place your orders as if it were your job.
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An attorney recently told me that a rep’s duties to his or her customers (in a non-discretionary account) terminate upon the consummation of the transaction. No wonder, that attorney cited a court opinion from 25 years ago. That court opinion is prehistoric in terms of how the securities industry and the roles of registered representatives (“financial advisors” and “financial consultants”) have evolved.
Consider the rep who does not explain the risks of a particular investment or investment strategy which are unsuitable in light of the customer’s financial capability or investment objectives. Likewise, consider the rep who fails to recommend a hedging strategy (such as a collar) for a customer who is unwilling or unable to sell his or her position. What are the duties of reps in those scenarios? In modern times, Professor Norman Poser states the guiding legal principle in his treatise Broker Dealer Law and Regulation (3rd Edition 2002 Supplement), at page 2-50:
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We will try to understand the basic concepts behind using ANALYZE to trade foreign exchange markets. We’ll start with the “basic principles of technical analysis,” skip “the best time to trade 24-hours market, and then study two technical analysis tools that are very effective in this volatile market trade” Candlestick Charts “and” Divergence “.