News and Commentary

Is your Financial Advisor Putting your Best Interests First? by Eric Zeitlin

The ongoing saga of the Fiduciary Rule continues on following a March 15, 2018, appeals court decision that invalidates the requirement that financial advisors and brokers conduct their business in the best interest of their clients. As we wait for the Department of Labor’s response to the court’s action, astute investors must remain diligent when researching and selecting advisors with whom they work. While some investment firms have already taken steps to adopt the fiduciary standard of conduct, other have not, leaving consumers with the responsibility to protect their interests and assets from potentially unnecessary products and fees. The only way investors will know for sure is to ask the right questions and listen for the right answers, some of which are listed below.

Question: How am I charged for your services?

Preferable Answer: The answer could be an annual fee based on the amount of your investable assets, a combination of fees and commissions from the products they sell to you, commission only, or even hourly or retainer fees. The point is that you should know from the onset how your advisor will be compensated, and what you will be expected to pay.

Question: Will you earn a higher fee or other type of compensation, now or in the future, if I invest in products you recommend? Will you receive fees for services related to specific investment products?

Preferable Answer: The answer could be “yes,” but full disclosure from the advisor will help you to make a more educated decision.

Question: Do you receive compensation from anyone else when you recommend certain products or services?

Preferable Answer: No.

Question: Do you earn fees or commissions for referring clients to other professionals, such as estate planning lawyers, insurance agents or tax accountants?

Preferable Answer: No

Question: Do you earn fees as an advisor to any investment that you recommend to clients?

Preferable Answer: No

Question: Do you participate in sales contests or other incentive programs sponsored by your firm or by providers of specific products or services?

Preferable Answer: No.

Question: Can I see a copy of all of all the fees and expenses that I will pay for you to manage my money?

Preferable Answer: Yes.

Question: What is your investment philosophy?

Preferable Answer: There is no right or wrong answer; but you should know how the advisor plans to invest your money.

Question: After inflation, taxes and fees, what is a reasonable estimated return on my portfolio over the long term?

Preferable Answer: You should look for a conservative number of less than 5 percent. If the answer is an exaggerated number or if it sounds too good to be true, it is probably false.

Question: Do you expect to beat the market?

Preferable Answer: No.

Question: How do you report investment performance?

Preferable Answer: Again, there is no right or wrong answer. Knowledge is power, and the more you know, the better you are able to make important decision.

About the Author: Eric P. Zeitlin is managing director of Provenance Wealth Advisors, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors and Accountants, and a registered representative with Raymond James Financial Services.  For more information, call 800-737-8804 or email info@provwealth.com.

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Eric P. Zeitlin is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.

Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James.

The information contained in this report does not purport to be a complete description of the developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

 


Need More Information?