Today many people are concerned about where they can go to find unbiased investment advice. Investment advice that is truly unbiased can help individuals and families plan for their future, achieve their goals and live the life they’ve always wanted.
If you are like most people, you assume that someone who provides investment advice to you must be required to act in your best interest. Unfortunately, that is only true for some advisors–we are called Fiduciaries.
Financial laws and regulations have two sets of rules:
One set is for people who sell financial products, generally brokers and insurance company representatives. These salespeople are legally and contractually obligated to place the interests of their employer ahead of the interests of their clients.
The other set of rules is for those who are registered as investment advisers (RIA’s) with the federal Securities and Exchange Commission (SEC) or comparable state regulators. Registered investment advisers are legally obligated to place their client’s interests first. They are fiduciaries. That means they must not only be loyal to serving their client’s best interests, all the time, they also must adhere to a higher standard of professional competence.
Unlike in other professions, such as law and medicine, anyone can call themselves a financial advisor-even if they are really a salesperson whose primary loyalty is to their employer rather than to those they advise. This situation is confusing for investors, and it needs to change.
I am a founding member of a grassroots organization of Financial Service Professionals known as The Committee for the Fiduciary Standard. The Committee’s goal is to educate legislators, regulators, and the investing public about the importance of protecting investors by extending the Fiduciary Standard to cover everyone who provides personalized investment advice.
Interestingly, the Committee includes a number of brokers and insurance representatives, in addition to registered investment advisers, who recognize how important it is to investors and society at large for advice to be truly trustworthy and based upon a uniform standard that requires advisors to be objective and competent.
The Committee has drafted the very straight-forward oath (our fiduciary promise) that commits an advisor to adhere to a fiduciary ethic and, in so doing, to be accountable for the advice he or she renders to the client. I have signed this oath and provided it to all of our clients as an affirmation of my pledge to always act with their best interests as my number one priority.
I strongly recommend that you insist that any advisor you work with be willing to sign this oath. The commitment is as simple as “mom and apple pie.” If the advisor will not sign the oath, you owe it to yourself to ask, “Why would I trust my financial future to someone who refuses to promise that my best interests will come first.”
I encourage you to share this letter and the oath with your family and friends.
Please call R.W. Rogé if you would like more information about why it is so vitally important to work with a fiduciary when you seek advice. Anyone of our advisors would be delighted to discuss this subject with you further.