I created a new account to ask this question for obvious reasons. Is it actionable (in a legal sense) if an independent ER firm (that also has a wealth management arm) is pushing products (mostly ETFs that they both control and generate) on clients regardless of the clients risk profile? So if a client comes in and says I am completely risk averse and the firm pushes the client to invest in an ETF that is comprised of small cap (almost penny) stocks, would that be an obvious conflict of interest or breach of fiduciary responsibility? Just started here so not trying to make waves.

Theoretically yes. It can be considered problematic if the client is smart enough and savvy enough to notice this. HOWEVER, it all depends on how the account is set up in the first place. Under most compliance policies, the account objectives are the groundwork for can and cannot be done in the account. Meaning, if you want to trade naked options, your account needs to have the account objectives of speculation at most firms.

Compliance question

Frieds

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Compliance question

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