Your Success Is Our Success
You deserve an advisor who is compensated in a manner that minimizes conflicts of interest. But, more to the point, the advisor must be held to a Fiduciary Standard, meaning that he or she will always put your interests first. You must always be sure your advisor is working for your interests, not his or her own.
RIA Stands For You
Registered Investment Advisors (RIAs) are held to a Fiduciary Standard. By law, a Fiduciary will act solely in the best interest of the client. They must fully disclose any conflict, or potential conflict, to the client prior to and throughout a business engagement. Fiduciaries will also adopt a Code of Ethics and will fully disclose how they are compensated.
Is Your Financial Advisor a Fiduciary?
Recent regulations put forth by the Securities and Exchange Commission (SEC) now require brokers and other professionals who are NOT considered fiduciaries to add the following disclosure:
“Your account is a brokerage account and not an advisory account. Our interests may not always be the same as yours. Please ask us questions to make sure you understand your rights and our obligations to you, including the extent of our obligations to disclose conflicts of interest and to act in your best interest. We are paid both by you and, sometimes, by people who compensate us based on what you buy. Therefore, our profits, and our salespersons’ compensation, may vary by product and over time.”
If this disclaimer appears, you should ask questions, obtain complete disclosure, and determine if the relationship with the financial professional is in your best interests.