Does your financial advisor work in your best interests?
The Security and Exchange Commission (SEC) rule called Regulation Best Interest, which is meant to reduce conflicts of interest among brokers who sell investments like mutual funds and annuities, may have made the situation worse (see CNBC article). According to that article the Financial Industry Regulatory Authority (FINRA), noted that there are a total of 625,000 brokers and 360,000 financial advisors for a total of 985,000. With 300,000 of the 360,000 financial advisors “dually registered” that leaves only 60,000 or 6% of brokers/advisors that must act as a fiduciary and do what is in their client’s best interests ALL of the time.
When looking for a financial advisor you can trust, a Google search of “how to select a financial advisor or planner” will lead to some pretty simple guidelines. The top three qualifications include selecting an advisor that is Fee-Only, a Fiduciary, and a Certified Financial Planner (CFP). A Fee-Only advisor is compensated exclusively by their clients meaning that potential conflicts of interest related to commissions for product sales are completely eliminated. Fiduciaries are like CPAs and lawyers, and are required by law to do what is in their client’s best interests. Financial advisors that are CFPs are held to a higher standard than brokers and advisors without the CFP designation. To earn and maintain their CFP designation an advisor must adhere to the following rules noted here.
Von Holt Financial Advisors has been a Fee-Only advisory firm and acted as a full fiduciary since its founding in 1992. Albert Von Holt has been a Certified Financial Planner (CFP) since 1994. Brock Von Holt is currently studying for his CFP designation which he is expected to complete in 2021.