There’s a lot to know when choosing a financial professional, but knowing the difference between fiduciary and suitability should make the short list.
Brokers operate under the suitability standard. Financial professionals in this category offer products carried by the company he/she represents. The suitability standard states that a broker only needs to check the suitability of a prospective buyer based primarily upon financial objectives, current income level and age in order to complete a commissionable sale of a financial product. No disclosure of possible conflicts of interests is required. The professional is paid a commission from a percentage of the amount of money invested into the product he/she sells.
Advisors operate under the fiduciary standard. Financial advisors are required by law to take into account the needs of each individual client and make recommendations that go beyond what would simply be suitable for his/her situation. Rather, they are required to provide guidance based on the best interest of their clients and to disclose any possible conflicts of interest. Advisors are paid through a quarterly fee calculated as a percentage of the assets under his/her management.
Recently, the federal government has shown an increased interest in how financial guidance is given to the general public. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act reflect this concern. Aimed at lowering risk in various parts of the U.S. financial system, one of the goals of the law is to create a single standard for financial advice based upon the current fiduciary standard.
We believe that every client deserves to have their needs put first and to receive guidance based on their financial goals.
Ask your current or prospective financial advisor if they are acting as a broker or an advisor and to formally list all the areas in which they and their company can receive commissions. This can help you determine whose best interests they have at heart.
» Next: How We Operate
To schedule a time to discuss your financial future, The Retirement Formula TM, and build your financial strategy, contact us at email@example.com or call us at (800) 875-1986 today!
We are an independent financial services firm helping individuals create retirement strategies using a variety of investment options to custom suit their needs and objectives.
It can be difficult to make financial decisions without access to information. If you have questions or concerns about your current retirement strategy, feel free to contact us using the form below.
Before you can plan your retirement, you need to know the facts. Fill out the form below to request our complimentary retirement kit today.
Advisory services offered through Securities America Advisors, Inc. Martin Shapiro, Representative and advisory services offered through Arbor Point Advisors, LLC Richard Gigliotti, Jeremy Keating and Alexander Mele, Representatives.CA Insurance Licenses: Jeremy Keating #0E28476; Richard Gigliotti #0H83102; Alexander Mele #0H82823; Martin Shapiro #0681852
Securities offered in the states of CA, TX, NY, NJ, PA, AZ, NV, MA, CO, AR, GA, IN, MS, MT, OR, TN, WA, WI, LA, FL, DE, NC, SC, MN