STANDARD OF CARE OBLIGATION HAS THREE COMPONENTS: KNOW THEM FOR THE SERIES 66 EXAM
The Series 66 Exam covers the fiduciary obligations of I.A. reps when dealing with retail customers. Standard of care has three components and is not merely defined as putting a client's interests ahead of the rep's. The three components are diligence, care and skill. Diligence—It takes effort and work to come to an understanding of various investments and whether the investments make sense for retail customers in general. Care—It takes care in assessing whether the investments make sense for the particular clients who are being served by the rep. Skill—And finally, it takes skill in assessing whether the investments in question are applicable for the client in view of his or her other investments and investment experience and profile. Here's how Bob Eder in his Study for the Series 66 Exam discusses standard of care: Standard of Care — As a fiduciary, an investment adviser must always select the choice that benefits her client. If there is any doubt, the adviser should