For years, I have attempted to explain the differences between a fiduciary and a typical advisor to my clients with moderate success. A fiduciary must always act in your best interest and is legally bound to do so. On June 5, the Securities and Exchange Commission passed a set of regulations to improve the transparency behind what advisors are acting in your best interest. The regulation aims to prevent the advisors who are not fiduciaries from calling themselves advisors. Unfortunately, I fail to see a scenario where this occurs in the near future and many have stated the new rules have made things more opaque.

But good news…

FINRA’s Broker Check website has been updated to make it easy for clients to be able to tell if there advisor is legally required to be a fiduciary and always act in their best interest. How? Well, it is simple.

Start by going to FINRA’s Broker Check website at www.brokercheck.finra.org. First, enter the advisor’s name in the box to the left.

Find your advisor’s name in the search results and click on “MORE DETAILS.”

If this page shows the advisor is a “Investment Adviser” and states the individual is “Not currently registered at a broker” on the right, then you know you are working with a fiduciary. If not, then it doesn’t matter what spin this advisor may put on their status as a fiduciary - they are not legally required to act in your best interest.

**My description shows I was a“Previously Registered Broker” since I was affiliated with LPL Financial prior to starting Noble Wealth Partners.

These relationships get confusing when you are working with an advisor that is dually registered as an investment adviser and a broker. Simply put, this means they can act in your best interest when they are acting in an “investment adviser” capacity and are not legally required to act in your best interest when they are acting as a" “broker.” Dually registered advisors are not uncommon. In fact, a large portion of the advisor community has chosen this path as it allows them to take large commissions off insurance, annuity sales, and other investment products.

I’ll remind you that 100% of fee-only advisor’s compensation is from what you are directly paying them for their services and not what they sell. Noble Wealth Partners is a fee-only advisory practice and we are legally bound to act as fiduciaries for our clients.

Again, the FINRA website allows you to distinguish true fiduciaries from these dually-listed individuals. With these individuals, you will notice they are listed as a “Broker Regulated by FINRA” while also listing “Investment Advisor” below. The far right shows the name of the Broker/Dealer they are affiliated with (in this case, “LPL Financial LLC”) instead of stating the individual is “not currently listed as a Broker.” Also, notice this individual has a disclosure below this name which may be from recommending unsuitable products or anything else FINRA deems as material for you to make an educated decision on the advisor you would like to work with.

Going forward, picking an advisor that is an advocate of your best interest has never been easier. Please reach out to myself, or Noble Wealth Partners if you have any questions. We are happy to help.

Your fiduciary,

Grant Glenn, CFA, CFP®

Sources:

Wall Street Journal

SEC

FINRA