Do you know if your financial advisor is working for you? Before you assume that is the case, do you understand the difference between \u201cfiduciary\u201d and \u201csuitability standards\u201d? The Obama Administration has proposed and the U.S. Department of Labor has held hearings about the \u201cfiduciary rule\u201d. President Obama wants financial advisors to be governed by the fiduciary standard. In other words, he feels that stockbrokers and others should be required to put their customers\u2019 interests ahead of their own (i.e., earning higher commissions). Is the President saying that stock brokers are putting their financial interest before yours? The answer to that is \u201cYES!\u201d<\/p>\n
Most financial advisors who work for the major stock brokerage firms are governed by the suitability standard<\/em>. As the current law provides, broker dealers, insurance sales persons and advisors who operate under the \u201csuitability standard\u201d are merely required to ensure an investment is suitable<\/em> for the client when the investment is made<\/em>. Why would your financial advisor not recommend what is in your best interests<\/em>? One reason often given by former advisors who worked at major stock brokerage firms is the pressure asserted upon them by management to push products that ALLOW THE BROKERAGE FIRM TO MAKE MORE MONEY! Why recommend another firm\u2019s product which may be in the best interests of the client, when an in-house product or another firm\u2019s product, although not as good, is nevertheless suitable for the client and allows the brokerage firm to increase its profits. There is also less responsibility associated with the suitability standard. The fact that there may be a fee-sharing arrangement between the parties need not be disclosed to the client, and if the recommendation later becomes unsuitable for the client, the advisor has little responsibility to notify the client. Talk about taking the money and running.<\/p>\n The \u201csuitability standard\u201d contrasts with the \u201cfiduciary standard\u201d which registered investment advisors, or RIAs, must follow and which avoids conflicts of interests and operates with full transparency. If the investment later becomes unsuitable for the client, the RIA is required to inform the client.<\/p>\n If you want to learn more about the \u201cfiduciary standard\u201d versus the \u201csuitability standard\u201d, you should Google these terms. A U.S. News article found online, Is Your Financial Advisor a Fiduciary<\/em>, can be found if you Click Here<\/a> and it gives a very good summary of the differences. You may be surprised to learn that rather than embracing the fiduciary standard, there are many brokerage firm leaders who are opposing this standard. While there are undoubtedly financial advisors who are not RIAs but who work in the best interests of their clients, don\u2019t assume your advisor is one. The article referenced above Click Here<\/a> has some key questions that you should be asking your advisor to better determine if he is working in your best interests.<\/p>\n If you want to discuss your tax preparation<\/a>, tax planning<\/a> or investment concerns with an experienced tax professional, we invite you to call 610-594-2601<\/a> today to make an appointment at our Exton PA CPA office<\/a> to discuss your situation. You can also schedule a consultation at Click Here<\/a>.<\/p>\n Do you know if your financial advisor is working for you? Before you assume that is the case, do you understand the difference between \u201cfiduciary\u201d and \u201csuitability standards\u201d? The Obama Administration has proposed and the U.S. Department of Labor has held hearings about the \u201cfiduciary rule\u201d. President Obama wants financial advisors to be governed by […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9],"tags":[],"class_list":{"0":"post-1756","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-wealth-preservation-strategies","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-sk","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=1756"}],"version-history":[{"count":4,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1756\/revisions"}],"predecessor-version":[{"id":1765,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/1756\/revisions\/1765"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=1756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=1756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=1756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Copyright \u00a9 2015 Keystone Financial Solutions, P.C. All rights reserved. BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/strong><\/h6>\n","protected":false},"excerpt":{"rendered":"