This should be the foundation of your investing relationship!

Watch this shocking PBS video. You will see how big banks and Wall Street firms may ruin your retirement…

Go to 16:30 to see the footage about why you need a fiduciary!

If you invest with any of the big banks (Bank of America, JP Morgan, Wells Fargo) or big brokerage firms (like Merrill Lynch, Morgan Stanley, Fidelity, Edward Jones and American Funds), you may want to rethink your strategy.

85% of Investors Don’t Understand The Foundation Of Their Advisor Relationship

Is the first obligation of your advisor to you (the client) or to the advisor’s firm and himself/herself? This distinction is the foundation of your relationship with your advisor and should be the first decision you make with your money. Advisors are officially registered in their practice as providing either:

1)  “Fiduciary standard of care”;

2)  “Suitability standard of care”;

3)   BOTH fiduciary and suitability standards of care.

According to J.D. Power and Associates, 85% of investors don’t understand the difference between suitability standard and fiduciary standard.  This is a costly mistake.

This is exactly what Wall Street wants!  They want to blur the lines between true fiduciaries and non-fiduciaries because non-fiduciaries can make significantly more money off clients… they can collect commissions, sales loads, 12b-1 fees and other fees.  Look at the ads and marketing… non-fiduciaries try to SOUND like a fiduciary.  Their ads say, “trust us”, “we put clients first”, “dedicated to you” and “we are on your side.” Let’s look at the facts and find out where the rubber meets the road.

Suitability Standard of care:

• Detailed in the Maloney Act of 1938 and regulated by FINRA.
• Non-fiduciaries need only offer investments and products that are “suitable” for clients but not necessarily in their best interest.
• Does not require that the advisor disclose how they are compensated, if there are conflicts of interest or hidden costs involved.
• Non-fiduciaries are allowed to make self-serving recommendations as long as they are suitable for the investor.
• Non-fiduciaries are salespeople who make a living selling investments.  Any advice they provide is merely incidental to the sale of the investments.  Brokers and insurance agents fall into this category.

Fiduciary standard of care:

• Detailed in the Investment Advisors Act of 1940 and regulated by the SEC.
• Fee-only Registered Investment Advisor  (no commissions, no loads, clear transparency)
• Required by law to act in a fiduciary capacity at all times.
• The client’s interests must always be put ahead of the interests of the individual advisor or firm.
• Transparent and full disclosure about how compensation is paid.
• Must disclose all potential conflicts of interest.
•  Get the fiduciary oath in writing from your advisor (in their ADV2 / firm brochure).

It is OK to trust your advisor but verify you have a fiduciary standard of care on your side!

Many advisors are good people, with noble intentions, and care about their clients.  However, most are in a business model design that is NOT required to put the client first.  Verify you have a “fiduciary standard of care” on your side.

Do not accept your advisor to be “fee-based” (NOT the same as fee-only). Do not accept dually registered advisors (those with both fiduciary and non-fiduciary standards of care).  Dual registration means sometimes the advisor is obligated to do what’s best for the client, sometimes he/she is not.  You deserve an advisor who, by law, will put your interests first.  Transparency matters.  You deserve a fee-only, fiduciary 100% of the time.

1) Hire a fee-only, low-cost, no commissions.  Most clients are shocked by how much they are paying in hidden costs with big banks and brokerage firms.

2) Choose a fiduciary Advisor.  Only 15% of advisors are a fiduciary for their clients.  Your Advisor should be a fiduciary for you 100% of the time.  Get it in writing!

3) Invest your portfolio using the “science of capital markets” and factor investing.  Stocks vs. Bonds, % value companies, % small cap companies and companies with direct profitability.

We build institutional portfolios that are globally diversified and have tilts toward value, small cap and direct profitability.

Find out how our approach may be more optimal than American Funds or Vanguard Funds.

Give us a call today – 303-549-4720 or Click here to subscribe to my blog

Thanks,

Todd Moerman

Managing Partner, Integrity Investment Advisors

Fee Only Fiduciary

Please Remember: Past performance may not be indicative of future results.  Moreover, no current or prospective investor should assume that future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in any general informational materials or educational sessions, will be profitable or equal any corresponding indicated historical performance level(s).  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for an investor’s retirement portfolio.  Moreover, you should not assume that any discussion or information contained in this website serves as the receipt of, or as a substitute for, personalized investment advice from Integrity Investment Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.