There are essentially two ways to participate in our financial markets. You can form a relationship with a Registered Investment Advisor (RIA) firm to serve as a liaison between you and the brokers who execute your trades. Or you can work directly with a broker.
Read all the financial news, and you’ll get dizzy sorting out who is doing what to whom. Let’s make it easier. As an RIA firm, we provide highly individualized planning and advice to help you cut through the complexities and most efficiently pursue your financial goals. We feel ours is a vital role, as detailed in our FAQ, “Fees, schmees. Can’t I do this myself?”
In contrast, a broker’s overarching role (and income source) is to execute trades. “There’s nothing wrong with that. After all, somebody’s got to do the trading. But make no mistake about what that means to you and your money. It boils down to an important differentiator: accountability.
As an RIA firm, we are accountable to our clients, and only to our clients. In legal terms, RIA firms are subject to a fiduciary standard, which means we must first and foremost champion our clients’ highest financial interests. We are held to this level of accountability by government regulators, by ourselves and, most importantly, by our clients.
Brokers may tell you they can assume the dual role of offering planning and investment advice, as well as executing trades. But there’s a catch. Because the industry considers trading to be a broker’s primary role, their advice is deemed incidental, subject to the less-accountable suitability standard. This allows brokers to place your highest interests secondary to their trading goals.
In our opinion, the advice you receive in planning and managing your wealth according to your highest interests should never be incidental or secondary. By selecting an RIA as your advisor, you are selecting the highest fiduciary standard of care.
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