Straight To The Point:

Chris gives us an honest perspective on what it’s like to work with an independent advisor versus a large brokerage firm. What are the advantages and disadvantages?

The Real Deal:

What’s The Difference?

  • 2:53 – An independent advisor works as a fiduciary. That means they have a legal and ethical obligation to put your interests first as the client. Brokerage firms are more sales driven. Brokers don’t get paid unless they sell you something. Therefore, there’s an inherent conflict of interest in their system.

Understand The Biases.

  • 4:38 – Brokerage firm have lots of products they want to sell. Investment advisors don’t create products. There is no selling involved. In fact, they have access to all sorts of products, but they pick and choose the strategies that work best for each client. It’s all about your unique situation.

What About The Suitability Standard?

  • 5:38 – Traditionally brokerage houses operated under a suitability standard. This meant they only had to offer products that were suitable for clients. It’s like taking your kids to McDonald’s. Sure, it’s suitable. It technically counts as nutrition, but is McDonald’s what’s really in your child’s best interest? Unless you want your kids eating french fries that appear as if they’ve been perpetually stuffed with formaldehyde, you probably want to avoid the mindset of suitability.

Are There Disadvantages To Working With An Independent Advisor?

  • 8:18 – There are certainly disadvantages to working as an independent advisor. Perhaps you have a small office or find yourself understaffed. However, as a client, you should feel secure when working with an independent advisor. Be sure they’re working in your best interest and be sure they’re properly licensed. One of the biggest challenges independent advisors face is making sure their clients feel secure. They lack the brand security that comes with the big brokerage houses.

Ultimately, Does It Matter Who You Work With? 

  • 11:30 – Absolutely. Independent advisors work in your best interest. Furthermore, they aren’t constrained by the same legalities as brokerage firms. Working with an independent advisor grants you access to all sorts of investment products. Work with a fiduciary who will represent your best interest.

Beyond The Zone:

The host: Chris Patterson – EmailWebsite – Tax Free Retirement Toolkit – Call: 904-285-4489

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