Breach of Fiduciary Duty by a Financial Adviser
Representing investors nationwide whose adviser put the adviser’s interests ahead of the client’s.
A fiduciary must put the client first. For a registered investment adviser that duty is imposed by the Investment Advisers Act; for a broker making a recommendation to a retail customer, Regulation Best Interest imposes an obligation that reaches much of the same conduct. When an adviser’s own compensation, a firm’s product agenda, or a related party’s interest drove the advice, the client has a claim that does not depend on proving a lie. Industria Business Lawyers represents investors in those claims nationwide.
This page explains who owes a fiduciary duty and under what rule, the conduct that breaches it, where a claim is brought, the deadlines, and what to gather. Every rule and statute cited was read at its source on 17 September 2026.
Every matter is reviewed on its own facts. Not every loss can be pursued, and you will hear that plainly either way.
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Fiduciary Duty Claims We Handle
Under section 206 of the Investment Advisers Act, 15 U.S.C. 80b-6, it is unlawful for an investment adviser to employ any scheme to defraud a client, to engage in any practice that operates as a fraud or deceit on a client, or to act as principal for its own account in a client transaction without written disclosure and consent. Under Regulation Best Interest, 17 C.F.R. 240.15l-1, a broker must act in the retail customer’s best interest without placing its own interest ahead. These are the breaches that most often reach an investor’s lawyer.
Undisclosed Conflicts of Interest
Compensation from the product sponsor, revenue sharing, proprietary products, or a relationship with the issuer that the adviser did not disclose before recommending the investment. Disclosure is the first obligation a fiduciary owes, and its absence is usually visible in the firm’s own records.
Self-Dealing and Principal Transactions
An adviser selling securities from its own account to a client, or buying from the client, without the written disclosure and consent section 206(3) requires. The trade confirmations show it.
Advice Driven by the Adviser's Compensation
Recommendations that produced higher fees or commissions for the adviser than a comparable product would have, with no benefit to the client that justified the difference.
Misuse of Client Assets
Unauthorized withdrawals, transfers to entities the adviser controlled, and accounts used as the adviser’s own. These claims combine breach of fiduciary duty with fraud and are pursued against the adviser and the custodian or firm that let it happen.
Failure to Monitor
An advisory relationship that promised ongoing management and delivered none: allocations never rebalanced, instructions never carried out, and a strategy never reviewed as the client’s circumstances changed.
Broker Best-Interest Breaches
Recommendations to retail customers that placed the broker’s or the firm’s interest ahead of the customer’s, the conduct Regulation Best Interest addresses. Where the broker is at a FINRA member firm, the claim goes to FINRA arbitration.
Who Owes the Duty, Where the Claim Goes, and by When
The answer depends on who the adviser was and what agreement the client signed.
Registered investment advisers. Section 206 of the Advisers Act governs. Claims are brought in the forum the advisory agreement names, or in court where it names none. Advisers who are not FINRA members cannot be compelled into FINRA arbitration.
Brokers and brokerage firms. Regulation Best Interest and FINRA’s rules govern. Under FINRA Rule 12200 the firm must arbitrate a customer dispute when a written agreement requires it or when the customer requests it, and under Rule 12208 IBL represents investors there from every state.
Dual registrants. Many advisers are registered both as investment advisers and as brokers. Which duty applied depends on the capacity in which the person acted when the advice was given, and the account paperwork usually settles it.
The deadlines. Under FINRA Rule 12206, a claim is not eligible for arbitration once six years have passed from the occurrence or event giving rise to it. In Florida, an action not otherwise provided for must be brought within four years under section 95.11(3)(o), Florida Statutes, and an action founded on fraud within four years under section 95.11(3)(i). Other states set their own periods. When the period begins is often the real question, particularly where the conflict was concealed.
The remedies. Damages for the loss the breach caused and, in appropriate cases, disgorgement of what the adviser earned from it, interest, and costs.
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Tell Us About Your Matter
How We Work a Fiduciary Duty Claim
Relationship Review +
The advisory or account agreement, the adviser’s registration status, the disclosure documents, and the capacity in which the adviser acted, to establish which duty applied.
Conflict and Compensation Analysis +
What the adviser and the firm earned from each recommendation, from the product documents and the firm’s disclosures, compared with what was told to the client.
Forum and Deadline +
FINRA arbitration, another arbitral body, or court, party by party, with each limitation period measured from its own starting event.
Statement of Claim or Complaint +
Drafted to frame the duty, the conflict, the breach, and the loss, with the exhibits that prove each.
Discovery +
Compensation records, revenue-sharing agreements, supervisory reviews, and the adviser’s communications, pursued under FINRA Rule 12506 in arbitration or the court’s rules in litigation.
Mediation +
Prepared with a damages analysis and a disgorgement calculation where the facts support one.
Hearing, Award, and Collection +
Argument before the panel or the court; then confirmation and collection. Under FINRA Rule 12904 a monetary award must be paid within 30 days unless a motion to vacate is filed.
FAQ
01 • Securities Is my broker a fiduciary?
A registered investment adviser is, under the Advisers Act. A broker making a recommendation to a retail customer is held to Regulation Best Interest, which requires acting in the customer’s best interest without placing the broker’s interest ahead. Which applies depends on the capacity in which the person acted.
02 • Securities My adviser disclosed the conflict in a long document. Does that end it?
Not necessarily. Disclosure must be full and fair, and it does not cure advice that was not in the client’s interest. Whether a buried disclosure meets the standard is decided from the documents.
03 • Securities Do I have to live in Florida?
No. IBL represents investors nationwide. FINRA arbitration is a national forum, and claims outside FINRA are assessed according to where they must be brought.
04 • Securities What does it cost to bring a claim?
Forum fees are set by FINRA, the arbitral body, or the court clerk and are public. How an engagement with IBL is structured depends on the case. Contact the firm to discuss your situation.
05 • Securities What should I gather before I call?
The advisory or account agreement, the adviser’s disclosure documents, account statements for the full period, every email and text with the adviser in date order, and a figure for the amount lost with the year it occurred.
Talk to an Investor Claims Attorney
Investors nationwide. Call (202) 860-1210 or send your agreement and statements through the form. Every matter is reviewed on its own facts.
This page provides general information about fiduciary duty claims against advisers and does not constitute legal advice. Reading it does not create an attorney-client relationship. Last reviewed 17 September 2026. Sources: 15 U.S.C. 80b-6; 17 C.F.R. 240.15l-1; FINRA Rules 12200, 12206, 12208, 12506, and 12904; section 95.11, Florida Statutes (2025).