The Embedded Financial Planning Risk — Fiduciary Liability

Law360, New York (October 16, 2015, 10:54 AM EDT) -- William E. Mahoney Jr.

Brandon Riley On Sept. 15, the Pennsylvania Superior Court ruled that a financial planner/insurance agent who sold a life insurance policy may have unwittingly created a fiduciary relationship with the purchasers, solely because the sale of the policy came on the heels of a financial analysis undertaken by the planner. Pennsylvania courts have long recognized that a fiduciary relationship may arise between a securities broker and a customer, depending on the circumstances. However, this newest decision upends the long-standing general rule in Pennsylvania that purchasing an insurance policy is an arm's-length transaction for which the insurer and...

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