Being Smart with $$ -- Isn't it Good for Your Advisor to Act in Your Best Interests?

How can it be a bad thing when your financial advisor is required to do what is in your best interest (acting as a fiduciary)?  Currently, many advisors only need to recommend products to you that are “suitable” even if not best for you.  The Department of Labor has instituted new rules requiring advisors to act as fiduciaries when advising on retirement accounts but the new administration has put it on hold.  I attended a conference with the Massachusetts Securities Division yesterday who likes that the press coverage on this issue has improved awareness.  So you need to PROTECT YOURSELF even if the current administration won’t.  Working with an advisor? Ask if they are a FIDUCIARY (not all are).  Ask how they get paid for what they recommend, what are some alternatives to what they are recommending and how they would get paid for those alternatives.  Use the smell test to decide if an advisor is focused on YOUR best interests or their own.
- Larry Pike, CFA, Client Priority Financial Advisors LLC
- www.clientpriority.com