Above all else, we hold ourselves to the “Fiduciary Standard.” This means that we always act in the client’s best interests. You may be surprised to know that many advisors and brokers operate under the “Suitability Standard”, which in our strong opinion opens the door to significant conflicts of interest.
The “Suitability Standard” (which applies to broker-dealers regulated under the Securities and Exchange Act of 1934 and according to FINRA Rule 2111) requires that they “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer.” In general, while FINRA and the SEC have determined that brokers violated the suitability rule by putting their own interests ahead of their customers, financial advisors that are regulated as brokers can recommend a product that pays them more over a product that pays them less, as long as the recommended product is still “suitable” for the client. This creates a potential conflict of interest. By holding ourselves to the fiduciary standard we always act in our clients best interest.
We typically work with clients on a fee basis (% of account value). Thus, when your account value rises, we get paid more. When your account value declines, we get paid less. We believe this puts us on the same side of the table with you. Our fate is tied to yours, as it should be.