Why it is important to know if you are working with a fiduciary…
There’s a big difference between the term “Registered Representative” and “Registered Investment Advisor.” Most are unaware of these differences.
Registered Representative work for Broker/Dealers and “sell” securities. They do not get paid for advice. Any advice given by a Registered Representative is incidental to the sale of the product. This is to mean, you’re not getting advice, but a sales pitch for a suitable product.
Registered Representatives are held to a suitability standard. The suitability standard is not straight forward and allows wiggle room for “always” in the best interest of the client.
Registered Investment Advisors are individuals or firms that provide advice for compensation.
This includes making investment recommendations, conducting analyses on securities, recommending plans to reach personal financial goals and objectives, etc.
Registered Investment Advisors operate under a fiduciary duty to his or her clients, which means they are fundamental obligation to always act in the clients’ best interests.
What is risk and how does it apply to my specific circumstances…
Risk is not one dimensional. It lurks in every area of investing. Having basic knowledge of the risk/reward tradeoffs, as well as how eliminating one risk can open you to another, helps investors make informed decisions.
Why fees and other cost matter…
If anything in the financial services industry lacks transparency it’s fees and expenses. Most consumers have no idea of costs in real dollars. By learning how to identify fees and costs you can save thousands, even hundreds of thousands, of dollars depending on your investments.
Why is asset allocation so important…
Academic studies demonstrate asset allocation plays a large role in long-term overall performance of investment portfolios. Having a basic understanding of asset allocation helps navigate the unpredictable nature of markets.
Why tax efficiencies inside a portfolio matter…
Fees and other cost affect portfolio performance… taxes are just another cost. Understanding the basic principles of taxes as it relates to different types of investments and investment accounts can help avoid unintended tax burdens. You can minimize taxes depending on how your handle your investments.
Do mutual fund rating services really tell the whole story…
Chasing stars and letters in hopes of achieving higher than average returns is not the way to a better investment portfolio. Historical evidence suggests rating services provide little benefit when choosing investments.
What does history tell us about investing…
A historical perspective gives investors a good understanding of long-term trends. History in no way predicts future performance, it does however help define expectations and helps investor make decisions for the future.
Just because an investment product is popular does not make it right…
Many products and programs advertised to consumers claim how principal might be protected through guarantees, or how to beat the market, etc., etc. Making decisions based on “sales talk” creates unintended consequences.
Incentives in the financial services industry drives a salesperson’s behavior, not the client’s needs or best interests. It’s to your advantage to become equipped with some basic knowledge and know if your receiving financial planning and investment advice or are you being sold a product.
