Author: Jean Fullerton
Who does your advisor work for - you or their company?
This question used to be muddled by brokers offering to be your ‘trusted advisor’, when in fact they were paid on commission by their company for selling you financial products (insurance, annuities, mutual funds). Well, the landscape just got even more muddled with new rulings by the Securities and Exchange Commission (SEC) and the Certified Financial Planner Board of Standards, Inc.
The SEC has come out with a Best Interest standard that requires brokers to act in your best interest SOME of the time, but it will be very hard for you to determine when that is, and when the broker is instead working for their own best interest. That’s why the Consumer Federation of America has stated :
“That’s why the chief supporters of this rulemaking are not the investors who want and need to be protected against conflicted investment advice, or state securities regulators who are on the front line on retail investor protections, or fiduciary advisers who have long embraced a higher standard, but the broker-dealers that make tens of billions of dollars annually steering investors into high-cost, risky investments that are highly profitable for the firm, rather than those that are best for the investor.”
At the same time, the CFP Board has now mandated that any Certified Financial Planner™ act in the best interest of their clients MOST of the time - whenever they are providing financial planning advice to their clients. This is a step in the right direction, but still not good enough.
Milestone Financial Planning works with clients on an on-going basis. With an annual financial planning subscription fee, and/or a fee based on assets that we manage, clients receive both financial planning and investment management, and have unlimited access to our advisors. We receive no commissions or referral fees. We put our clients’ interests first.