Tuesday, November 8, 2011

Best vs. Suitability Standard

You ever go to a store when a sales person asks--"Can I help you find something?" To which you reply--"I'll know it when I see it."  That is similar to what is often said when we meet with new prospective clients.  "I knew there were people like you I just didn't know how to find you." 

There is a HUGE debate right now in Washington regarding accountability and legal responsibility for companies who claim to be FINANCIAL-- ADVISORS, CONSULTANTS, PLANNERS, ETC.  The companies who manufacture products--insurance, mutual funds, etc.-- like to call themselves anything but salesmen.  The products are needed but the "advice" they give struggles to be objective.  

The Investment Advisors Act of 1940--you know hopefully before a lot of this political pressure got going--basically says if you hold yourself out to be a financial advisor you are a fiduciary and must do what is BEST for the client not just what is suitable.  Attached to this post is a You Tube video of a young advisor who spells it out pretty clearly on some of the differences.  We are fiduciaries for our clients and would be happy to answer questions regarding this issue.


http://youtu.be/yz7NEVtJaUY

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