Bill
LC 108
Overview: Bill Number: LC 108, Title: Allow retroactive termination of investment advisor under certain circumstances, Status: (LC) Draft Died in Process, Introduced: September 04,
Overview: Bill Number: LC 108, Title: Allow retroactive termination of investment advisor under certain circumstances, Status: (LC) Draft Died in Process, Introduced: September 04, 2024
Purpose and Intent: The purpose of this bill is to provide investors with the ability to retroactively terminate their relationship with an investment advisor under specific circumstances. The intent is to protect investors from potential misconduct or unsuitable advice.
Key Provisions:
- Allows investors to terminate an investment advisor's contract and seek reimbursement of fees paid, even if the contract has already been in effect
- Establishes criteria for when retroactive termination is permitted, such as the advisor's failure to disclose material information or provide suitable recommendations
- Requires investment advisors to provide clear and prominent disclosures to clients about their right to seek retroactive termination
- Outlines the process for investors to initiate and substantiate a claim for retroactive termination
Affected Parties and Impacts:
- Individual investors who have worked with investment advisors would have an additional recourse if they believe they have been wronged
- Investment advisory firms may face increased liability and potential financial losses due to retroactive terminations
- Regulators may need to establish guidelines and oversight mechanisms to ensure the provision is not abused
Procedural and Timeline Considerations:
This bill was introduced in the legislature but did not progress further, effectively dying in the drafting process. No additional action is expected.
Compiled from official sources — confirm details with the bill’s official record.
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