Q. How to pick the best financial advisor to work with?
A. Like any products or services, the financial advice you receive differs in quality.
Not all financial advisors are created, or governed, equal. There are two important yet different standards the "financial advisors" have to stick to - "suitability" and "fiduciary". The table below lists the key differences between the two.
A. Like any products or services, the financial advice you receive differs in quality.
Not all financial advisors are created, or governed, equal. There are two important yet different standards the "financial advisors" have to stick to - "suitability" and "fiduciary". The table below lists the key differences between the two.
| What is it Who sets it Who does it govern How is the pricing The bottom line | Suitability It asks "if the product is suitable to be sold to the investor". The Financial Industry Regulatory Authority (FINRA) Most financial advisors (e.g. VP's at Wall Street firms) Typically commissions Loose regulation, customer interest in not the top priority | Ficuciary It requires the advisers to act at all times for the sole benefit and interest of the investor. The Securities Exchange Commission (SEC) Registered Investment Advisers (RIAs) Typically fees of assets under management Stricter regulation, customer interest always comes first. |
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