Tastes Like Chicken! Smells Like Fish!

Every once in a while, I run into an investor who bought a financial product that, upon reflection, may not have been totally appropriate given the individual's personal and financial circumstances.


Not that the investment was completely "wrong", but perhaps a different product or approach may have better met the client's goals and objectives.


One thing you can do to help keep this from happening to you, is to find out who the advisor works for.  I don't mean the specific company that employs him or her, but the type of company that employs the advisor.  That information can go a long way to help you understand whether the financial advisor's loyalty is to you, or to the employer.


When a financial advisor works for a broker-dealer, a bank, or a large Wall Street firm, his or her loyalties must be first and foremost to his employer, and not to the client.  Under most of these types of employment arrangements, the advisor has a quota to meet.  If he or she does not "make the numbers", the financial advisor may be penalized in terms of pay, bonuses, benefit reductions, reductions in company retirement plan contributions, or in the worst case situation, possibly termination from his or her job.


So what can you do to help protect yourself?


Look for a financial advisor who is affiliated with a Registered Investment Advisor (RIA), such as Financial Abundance.  By law, all RIA's must place the interest of their client above that of the advisor or the firm he or she works for. Their professional responsibility requires an adherence to this highest level of care at all times.


There is a name for this high standard and it’s called the Fiduciary Standard.

So, ask your financial advisor if he is "caring" for you at the Fiduciary Level, or something else.


Take a look at this 2 1/2 minute video linked below for an interesting analogy as to how this works.




R. Paul Nichols

Financial Abundance, Inc.

(814) 867-5745

(814) 867-5747 Fax