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Steps Investment Professionals May take to Avoid Claims
Review and update investment plans strategies and risk tolerance guidelines with the client(s).
Make sure to listen, document and communicate your efforts on their behalf.
Review and understand life changing conditions of your clients and their goals.
Whenever possible educate your clients on risk conditions, long term versus short term investment goals and diversification.
If you are advising a company's ERISA plan make sure the plan carries fiduciary insurance and fiduciary bonding.
If you work with other investment professionals make sure they carry errors and omission (E & O) insurance and if possible make sure it covers their acts as a fiduciary.
Make sure your E & O insurance provides coverage as a fiduciary, read and understand your coverage and avoid gaps in coverage for your professional services.
If you see something wrong or question any transactions made by one of your clients you are obligated as a fiduciary to not look the other way.
Avoid any appearance of a conflict of interest; be fully transparent on fee arrangements and referral fees.
Avoid difficult clients , it may be better to lose them, than to allow relationships to foster in an adversarial climate