Annuities, whether fixed or variable, are typically chosen by investors looking for a relatively conservative return. Often, the intent is not to maximize their earnings but to establish a safe and reliable source of income into one’s retirement years.
As a result, missteps by a broker can be particularly jarring, creating an income shortage the investor was attempting to avoid from the beginning.
Investors depend upon their brokers to make good decisions with the money they invest. As such, brokers are obligated to act with both a duty of care and a duty of loyalty, to provide a level of protection to the investors.
Negligence, at its most basic, is when an individual fails to act with the requisite care required of them by law. When their failure results in damage to another, the law empowers the injured party to act. It’s important to note that losing money, by itself, is not proof of negligence. A broker must also act, or fail to act, in a manner inconsistent with their legal duties.
The duties of care and loyalty demand that the broker must, at all times, serve the best interests of their client. They cannot put their own interests ahead of those of the client. This means that a broker must avoid conflicts of interests or, at the very least, disclose real or potential conflicts so that the investor can make informed choices.
The precise duty of a particular broker will vary, changing from one client to the next and depending upon the nature of their relationship. Because of this, finding evidence of a broker’s negligence requires a thorough examination of the relationship and the investment at hand. But if you have been the victim of broker negligence, taking legal action may be your best option.