We are held to a different standard of care than many other financial advisors. Not all financial advisors operate the way we do, and we believe investors should understand the difference.
There are typically two standards that govern how financial advisors may work with their clients … “fiduciary” and “suitability.” As fee-only investment advisor representatives, we are held to a fiduciary standard in all of our investment recommendations. One of the legal duties of a fiduciary is to serve your best interest. However, many other financial advisors operate under a suitability standard which allows them to consider how much they might earn when recommending investments. Depending on the type of account, they may recommend investments that are “suitable” for you but not necessarily in your best interest.
A more thorough discussion of this topic can be found at The Institute for the Fiduciary Standards’ website. Please see www.thefiduciaryinstitute.org for more information.