Some financial professionals such as investment brokers and insurance agents aren’t bound by fiduciary duty. Instead, they’re only required to fulfill a suitability obligation. While fiduciaries must put their clients’ best interests before their own, financial professionals who adhere to the suitability standard must only provide suitable recommendations to their clients.
In January 2016, Hogan made a debut as an author when he published Retire Inspired: It’s Not an Age, It’s a Financial Number. The book, which provides readers with strategies on how to save enough money for retirement, instantly became a hit as it reached number one on several bestselling lists, including The Wall Street Journal and Publishers Weekly.
First, no computer model or customer service department is going to be able to match the level of service that can be provided by an on-site financial professional. Computer models often require a certain level of expertise to correctly interpret financials, and retirement plan customer service representatives are generally limited in the scope of advice they can provide to employees. Therefore, having a fiduciary advisor on staff will meet the employer's fiduciary requirements in a way that cannot be duplicated.
Once you have a solid understanding of the various aspects of the financial services world, it is time to spend some time talking to the experts. Financial services professionals make a living with their expertise and can help you learn about everything from mortgages and debt management to retirement and estate planning. Some of these topics are covered in seminars, others in one-on-one consultations. You can even pick up a thing or two just by having an informal conversation. Talk to a professional financial advisor, talk to your banker, talk to your accountant and your attorney. Then listen and learn as they share their knowledge.
Employers will also be required to conduct periodic in-house reviews of the fiduciary advisor to ensure that the advisor continues to adhere to the initial criteria the advisor had met when he or she was hired. In fact, the PPA Act allows for an exception to the Securities and Exchange Commission (SEC) rule that prohibits advisors from using historical investment results for clients in written literature or advertising of any kind.
All investment advisors registered with the U.S. Securities and Exchange Commission (SEC) or a state securities regulator must act as fiduciaries. Broker-dealers, stockbrokers and insurance agents are only required to fulfill a suitability obligation. This means that while they must provide suitable recommendations to their clients, they don’t have to put their clients’ interest before their own.
By the time you finish these four books, you are likely to have identified specific items that you would like to learn more about. For these inquiries, there's no better place to go for fast, easy access to information than online. Investopedia and similar sites provide access to a wealth of information that will keep you busy for weeks, if not months, including newsletters that will keep you updated on a daily basis. Investopedia's journeys are particularly notable, as they provide an in-depth look at a wide variety of topics.
The financial services field is constantly evolving and changing. Recent decades have seen the rise of unified managed accounts, the development of exchange traded funds (ETF), the evolution of annuities and insured investment products, and a host of other developments. Change is par for the course as the industry adapts to dynamic economic conditions and changes in what investors want and how they wish to deploy their assets.
This is a broad term for a professional who helps manage your money. You pay the advisor, and in exchange, they help with any number of money-related tasks. A financial advisor might help manage investments, broker the sale and purchase of stocks and funds, or create a comprehensive estate and tax plan. If the advisor is working with the public, they must hold a Series 65 license. In addition to that license, there are many other financial advisor credentials the advisor might hold, depending upon the services that are provided.
Choosing a fiduciary financial advisor can give you greater peace of mind. With a fiduciary financial advisor, you’ll know that the person managing your money must make decisions in your best interest. In general, fiduciary financial advisors tend to have fewer conflicts of interest, and they’re required to disclose any potential conflicts of interest that they have. Financial professionals who earn commissions may be incentivized to sell their own products even if there are comparable products available at a lower cost. Fiduciaries must seek the best prices and terms for their clients. Thus, if you work with a fiduciary you’re more likely to end up with the product or recommendation that’s truly right for you.
In Australia, a company providing financial services must obtain a licence from the Australian Securities and Investments Commission (ASIC). However, there are no requirements for the individuals providing the financial advice, and the ASIC website states that "Holding an AFS licence does not provide a guarantee of the probity or quality of the licensee's services."