The Fiduciary Standard
Sponsors of recent proposed changes have claimed that they bring the roles closer together by providing a “best interest requirement” for brokers starting on June 30th 2020. Until then, they have no obligation to even consider your best interests, let alone act in them and they will continue to primarily act in their own interests when you hire them. This requirement imposes a best interest requirement on brokers only at the time that they make a recommendation of a specific investment. All other communications (general market information, discussion of a retirement plan - workplace or otherwise, asset allocation discussions and advice etc - in other words about 90% of client/advisor communication) is not covered and the broker has no obligation to consider the interests of the client at these times and is perfectly entitled to work in favor of their own interests and against those of their client. There is no mention of the fiduciary standard in the “best interest” rule.
A CERTIFIED FINANCIAL PLANNER™ who works for a RIA has a second level of fiduciary duty, this time imposed him by the CFP® designation.
So, whether you engage with Anglia Advisors or not, please do NOT hire a financial advisor who will not commit in writing to act as a fiduciary to you at all times for all of their services by providing you with a Form ADV (see below).
Think of it this way .. there are qualified doctors out there and there are also pharmaceutical sales reps selling products. Both very valid professions in their own right. But if you are sick, you’d better hope you are talking to a doctor, not a pharmaceutical sales rep.
Beware of titles. There is no regulation which covers what anyone calls themselves. Being called a financial planner, financial advisor, financial coach, money coach, investment advisor, wealth manager or any other seductive name is meaningless. Anyone can give themselves these titles and it requires no qualifications to do so. They are breaking the law if they are unregistered and offer financial advice for compensation, but that doesn’t stop many unqualified charlatans from doing so.
Actual designations such as CERTIFIED FINANCIAL PLANNER™ (CFP®) professional or Certified Divorce Financial Analyst (CDFA®), however, are at the very least indicative of a very significant course of study, the passing of a highly challenging exam and adequate, appropriate experience in financial planning and the CFP® one, in particular, gives an additional layer of fiduciary responsibility since, as mentioned earlier, maintenance of the designation depends on acting in a fiduciary manner.