[ Ссылка ] Fiduciary Investment Advisor in Jacksonville
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Finding a good financial advisor is no walk in the park. Unlike recognized professions like law, medicine, accounting, or even, gosh, beautician (1200 hours to become a barber in Florda!), there is no recognized standard for exactly what a is financial advisor, what industry they work in, what knowledge is required, or whose interests they must put first.
The gambit really runs from folks with no training at all, to life insurance reps who’ve passed the “60 hour course”), to financial planning PhDs like me.
I bet we all look good in a suit!
Of course, with such loosey-goosey “standards” and the bubbling quagmire of confusion that defines the advisory occupations, who gets paid – er, put – first is very often not you.
This situation has endured for pushing a century, if not longer.
After the 1929 meltdown, the brokerage business was codified by the Securities and Securities Exchange Acts of the early 1930’s, later followed by the 1940 Investment Advisors Act, the latter of which specifically defined fiduciary investment advisors – also called “investment counsel” – as separate and distinct from commission brokers.
Back then, fiduciary investment advisors were a distinct professional class, but now it seems like anyone can – and does – call themselves an investment advisor, even when they’re really not so far as the Federal law goes. These days, according to a seminal government study and plenty other evidence, even smart, sophisticated investors are often woefully confused when it comes to financial planners and other “advisors”. Players in the securities brokerage world, the life insurance industry, accountants, bankers from junior teller on up, even funeral homes part-timers all vie on this field, proudly wearing “financial advisor” stripes on their helmets, horned or otherwise.
The situation has not changed very little since then. Even the SEC's new Regulation Best Interest (BI), which will soon impose a requirement that brokers make individual recommendations based on customers' "best interests," does not require fiduciary treatment, or even that brokers generally act in customers' best interests on an ongoing or holistic basis. It is very piecemeal. It is also worth noting that the scads of commission life insurance salespeople will not even be beholden to BI when selling fixed insurance products, like equity indexed annuities, which to most consumers smell just like SEC-regulated securities.
So picking an advisor can be a real crapshoot. For me – speaking as both an advisor and an academic researcher specializing in advisor professionalism, training, competence and ethics – it really comes down to four critical aspects:
Fiduciary? Are they drop-dead fiduciaries who have to put you first? Many appear to be, or even say they are, but the truth can be balanced on a pretty slippery slope. This is something consumers really need to understand and get written assurances on. Many may appear to be, even after the hidden commission knives come out.
Cost? How do they charge? While theoretically, or better in a perfect world, it might be possible to get paid on a commission basis whilst still putting the product buyer first, the conflicts of interest can be easily so profound as to be insurmountable. On commissions, the more an advisor gets paid, the more the client suffers. In my view, and having come up in the business as a commission guy before getting fee-only religion back in the 1990s, this path is hopelessly dangerous for consumers.
Expertise? How educated in financial planning matters is the advisor? Government licenses for life insurance or securities (such as Series 7, 6, 65, and so on) convey no real expertise. Back in the day, I passed the Series 7 the first time with only a degree in Chemistry and a week’s study. I knew a broker who never even bothered to open the book, he just took the exam a couple of times – cold – until he figured out a enough to pass. In a field as complicated as medicine or law, you want the best-trained advisor you can find. The well-known CFP® is a good place to start and indicates generalist study of taxes, investments, insurance, retirement, estate planning, and running financial plans. The CFA® is a rigorous investments credential signaling deep expertise. For an advisor running your investments, it makes sense to get an expert like a CFA® . EAs, CPAs and some attorneys have deep tax expertise. For even greater knowledge, some advisors acquire advanced academic degrees, including masters and PhDs (your humble author is guilty on both counts). In my view, a practitioners’ “Wealth Doctor” doctorate should be the eventual goal of advisory credentials (for more on this see my recent interview with Barron’s)

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