ask us questions to make sure you understand your rights and our obligations to you, including the extent of our obligations to disclose conflicts of interest and to act in your best interests. We are paid both by you and, sometimes, by people who compensate us based on what you buy. Therefore, our profits, and our salespersons’ compensation, may vary by product and over time.” This language reveals the all-too-common discrepancies that arise between a broker’s and a client’s goals.
Solutions A Fiduciary Advisor When choosing a financial advisor, an investor is best served by working with a fiduciary. The word “fiduciary” originates from the Latin word fiduciarius, which means “holding in trust.” In the investment industry, a fiduciary is obligated to act solely in the best interest of the client. Registered investment advisers (RIA’s) are fiduciaries and are held to fiduciary standards by the U.S. Securities and Exchange Commission (SEC), so they are legally and ethically required to put the client’s needs above their own at all times. An RIA is paid solely for advice, accepting no compensation for any investment products recommended to clients. An RIA that specializes in passive investments helps investors: • Invest according to their risk capacity • Properly allocate assets across a blend of globally diversified, passively managed index funds • Maintain a portfolio with appropriate risk exposure
Published on Jun 1, 2015
This book reveals the potential land mines and pitfalls of active investing and educates readers on the benefits of passive investing with i...