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Signs Your Advisor May Not Be A Fiduciary Thumbnail

Signs Your Advisor May Not Be A Fiduciary


You may remember me ranting a bit about the Fiduciary rule last year.  This is the “radical” concept that advisors are required to put their client’s interests first.  I know, radical, right?  Well, after lots of successful lobbying, that rule was quashed.  Recently, the SEC has enacted their own version of something that is supposed to protect clients. It is named the Regulation Best Interest (Reg BI).   I was reading a blog post from John Anderson of SEI and he started comparing Fiduciary advisors vs. Reg BI brokers in a Jeff Foxworthy-type example.  So, without further ado, signs your broker may not be a fiduciary.

  • If your advisor has to give you a government-mandated document, asking you to ask him about his potential conflicts,…your advisor is not a fiduciary.

  • If your advisor tells you they will be putting your best interests first, but cannot tell you what exactly that means…your advisor is not a fiduciary.

  • If your advisor has to clarify what is “solely incidental” advice…your advisor is not a fiduciary.

  • If your advisor refuses to put in writing they are a fiduciary…your advisor is not a fiduciary.

  • If your advisor answers the question of whether they are a fiduciary with anything other than quickly saying ‘Yes’…your advisor is not a fiduciary.

  • If your advisor slaps “Fiduciary”over all their marketing material…they may not be a true fiduciary.

  • If your advisor has sales contests at his firm…your advisor is not a fiduciary.

  • If your advisor is required to give you a document that includes information such as fees charged, services offered, conflicts of interest, and a history of legal or disciplinary actions against the advisor and his firm…your advisor is not a fiduciary.

These are just a few of the ways you can tell whether your advisor is a full-time fiduciary or not.   As a CFP®, I am always a fiduciary.   The interests of my clients always come first.  Additionally, because I charge a flat fee instead of charging commissions or a percent of assets I manage, I believe my ability to continuously put my clients interests first separates me from most of my competitors.

So, if you are wondering whether your advisor is a full-time fiduciary, feel free to borrow any of these examples and ask them questions to confirm whether or not they are a fiduciary.   Again, it doesn’t take a rocket surgeon to put your interests first.  Unfortunately, too often in this confusing world that is the financial services industry the advisor’s interests come first.  Ultimately, the goal is for your advisor to improve your situation/retirement and not their own.  If they aren’t, well, you need to find a new advisor who is a full-time fiduciary.