Louis S. Harvey
| Published by Dalbar | Aug 2, 2016
While not explicitly stated the many requirements of recommendations can only be accomplished through a separate well-designed permanent communication. Verbal recommendations are simply not feasible and are fraught with risk. Litigation is expected to focus on failure to comply with the requirements for making recommendations.
In the first place, BICE holds the advisor responsible for the recommendation. Unlike securities regulations, BICE is only concerned with the advice that is given, NOT whether the advice was taken and a trade executed! The recommendation becomes the “confirm” of the advice.