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In doing some research on the differences between attorney malpractice and the much rarer broker malpractice, I've been looking at stockbroker websites. I have this impression that those Sunday afternoon commercials for stockbrokers are fairly overt, promising implicitly that these firms will guide you through with expert advice that you can trust. However, investors can't sue brokers for faulty advice or a faulty plan unless the plan is patently "unsuitable" based on the investor's proclaimed "suitability." But, if a broker says that Enron is going to go sky high, and then it doesn't, that's too bad. Brokers aren't guarantors; you knew the risks. However, if you went to see an estate planning attorney and asked for a plan to save on estate taxes, and the plan ended up being stupid, you might have a malpractice case. (Note: broker malpractice case law is hard to find, given the securities arbitration scheme that leaves no precedential paper trial. Aaaargh for me.)

Anyway, stockbroker websites are very interesting. Even the "individual investor" pages really focus on the fact that your investing strategy is your investing strategy. They will give you some tools and resources to create and implement that strategy, but it's yours. For example, Merrill Lynch tells you "[f]rom establishing objectives to setting strategy, implementing the solutions and then regularly reviewing progress, your Financial Advisor can help as you implement your own strategies for success." Charles Schwab tells you "[t]hat's why we give you greater control over everything from the investments you make to the accounts you open to the type of advice and service you desire." Is this investor empowerment or liability avoidance?

I cannot imagine a law firm touting on its website that the firm will help individual plaintiffs or estate planning clients "implement your own strategies"? (On the BakerBotts estate planning page, that firm declares, "A detailed working knowledge of the estate tax leads to the successful development, implementation, and defense of the most sophisticated and effective estate plans for our clients." You don't have to develop and implement the plan, we'll do it for you. What about a physician that advertised that his practice "gives you greater control over everything from the medications you take to the type of diagnosis and treatment you desire."

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In doing some research on the differences between attorney malpractice and the much rarer broker malpractice, I've been looking at stockbroker websites. I have this impression that those Sunday afternoon commercials for stockbrokers are fairly overt, promising implicitly that these firms will guide you through with expert advice that you can trust. However, investors can't sue brokers for faulty advice or a faulty plan unless the plan is patently "unsuitable" based on the investor's proclaimed "suitability." But, if a broker says that Enron is going to go sky high, and then it doesn't, that's too bad. Brokers aren't guarantors; you knew the risks. However, if you went to see an estate planning attorney and asked for a plan to save on estate taxes, and the plan ended up being stupid, you might have a malpractice case. (Note: broker malpractice case law is hard to find, given the securities arbitration scheme that leaves no precedential paper trial. Aaaargh for me.)

Anyway, stockbroker websites are very interesting. Even the "individual investor" pages really focus on the fact that your investing strategy is your investing strategy. They will give you some tools and resources to create and implement that strategy, but it's yours. For example, Merrill Lynch tells you "[f]rom establishing objectives to setting strategy, implementing the solutions and then regularly reviewing progress, your Financial Advisor can help as you implement your own strategies for success." Charles Schwab tells you "[t]hat's why we give you greater control over everything from the investments you make to the accounts you open to the type of advice and service you desire." Is this investor empowerment or liability avoidance?

I cannot imagine a law firm touting on its website that the firm will help individual plaintiffs or estate planning clients "implement your own strategies"? (On the BakerBotts estate planning page, that firm declares, "A detailed working knowledge of the estate tax leads to the successful development, implementation, and defense of the most sophisticated and effective estate plans for our clients." You don't have to develop and implement the plan, we'll do it for you. What about a physician that advertised that his practice "gives you greater control over everything from the medications you take to the type of diagnosis and treatment you desire."

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