A stockbroker commits a fraud when the conflict between the interests of the stockbroker, or the interest of the wire house or stock brokerage firm that employs the stockbroker clash. Financial advisors cannot serve two masters, and if they do they must reveal the conflict and either withdraw or advise the investor to seek advice from a neutral party. Conflicts between investors and stockbrokers which rise to fraud or misdeeds include: biased investment advice, unfounded investment bias, and contradictory investment advice. When a stockbroker tries to persuade or encourage an investor to act or failed to act without appropriate research he has committed an actual fraud. Fraud arises from the reliance of the investor on the advice of the finance professional when in fact the financial professional lacks the foundation of fact upon which to advise an investor.

The major brokerage houses with offices in Fort Lauderdale, West Palm Beach, and Boca Raton have in place excellent supervision programs for their financial advisors. Nonetheless there are internal conflicts within the organization that are either unknown to the financial advisor or which go under the radar when the advice is forwarded. Most brokers act in good faith and establish excellent relations with clients such as you based on their experience and honesty. Many brokers however are unaware of the financial dealings of the brokerage firm from which they operate. To simply seek out a conflict between the broker's individual purchases and investments and those of the clients does not go as far as you need to go.

When the arbitration based on broker conflict is undertaken and the brokerage firm is served with a subpoena they've often reveal, or choose not to reveal, investment activities which are in fact conflicts. The claim of a broker conflict therefore expands beyond the individual broker and dealer but expands to the horizon of all investments of the brokerage house from which your broker works. Additional areas are conflicts are conflicts of interest inherent in the stockbroker relationship to the wire house and the client and conflicts between investment advice and stockbroker guidelines promulgated by the security exchange commission or FINRA. Stockbrokers and financial advisors have a duty, a fiduciary duty, to conduct their practice with a standard of care that rises beyond just casual advice. A broker conflict can be both structural, that is based on a conflict between the interests of the stock brokerage firm and you the individual investor or it can be relational, that being a conflict between the investor and the individual financial advisor, stockbroker.