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shingle theory

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Financial Dictionary

Shingle Theory

A suitability doctrine first introduced by the SEC in the 30's. The idea is that a broker who hangs out a shingle will represent his/her customers fairly and responsibly when making suggestions regarding securities.

Investopedia Commentary

Also referred to as fiduciary duty, these suitability doctrines were originally used to ensure the protection of investors from unscrupulous broker-dealers.

Note: A shingle is slang for a small sign, indicating a professional office.

See also: Fiduciary, SEC

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