Triplett-Westendorf Financial Group

How Is The Financial Professional Licensed?

Is it important to you to understand how a financial professional is licensed and compensated? If not, maybe it should be. Knowing how your advisor is licensed and compensated may be the key to avoid receiving conflicted advice.

Does your ideal advisor relationship include working with a professional who receives a commission when you purchase a recommended investment product, or does your ideal advisor relationship include receiving advice from a fee-based fiduciary advisor free from the conflict of commission based compensation?

Before you select an advisor, determine if this is important to you. Then ask if the investment professional is a representative of Register Investment Advisor (RIA) acting as fiduciary, or as a commissioned broker selling mutual funds, stocks, bonds, or other investments products who may have a conflict of interest when making recommendations.

Some advisors may be acting as both. They are dually registered as an investment advisor, at the same time operating as a registered representative of a broker dealer selling investments.  Ask yourself if you are OK with receiving advice from a professional who may be switching hats from commissioned broker to fee-based fiduciary when it conveniently supports their desired narrative.

Is Bigger Better?

Big name Investment Advisory Firms may have a lot of name recognition. After all, they spend a lot of money to ensure the public becomes familiar with their brand. However, is bigger really better?

Many of the largest Investment Advisory firms are affiliated with big name wealth management firms. The big name firms are often publicly traded companies. As publicly traded companies, their duty may be to the company stockholders first, and their clients second. Advisors working for large national public financial firms may unfortunately be caught between a rock and a hard place. 

On the other hand, privately owned Registered Investment Advisory firms may not be household names. Their marketing plans are not likely to include national television spots. However, they are required by law to act as a fiduciary, placing their clients’ interests above all others.

They must render advice that places their clients’ interest above that of the owners of Registered Investment Advisory firms, the employees of the firm, the investment advisor representatives, and any other entity who may benefit from their advisory services. If you want a relationship with true fiduciary duty to you and no one else, bigger may not be better.   

“Investment Adviser Representative of and advisory services offered through Royal Fund Management, LLC, a SEC registered investment adviser.”

Leave a Reply

Your email address will not be published. Required fields are marked *