Conduct standards for investment advisers in the US reflect the balkanised structure of US regulation of financial services, a highly politicized regulatory environment, mutually reinforcing private and public enforcement mechanisms, the type of account and asset at issue, and the nature of the division of power between federal and state actors. Such a melting pot defies generalization, but certain themes persist over time. The US system has a public and private culture of strong enforcement of antifraud proscriptions in which diverse regulators and private rights of action afford meaningful, albeit hard to measure protection for retail investors. But it also reflects a culture of caveat emptor in the absence of outright fraud. Although the recent trend toward strengthening existing fiduciary obligations has followed a bumpy path, over time there has been a long-term reversion to a mean of steady progress toward a universal fiduciary standard for retail investment advice.
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