Being an Independent Investment Advisor means two things to me and to our clients. 1. We are required to act as Fiduciaries https://www.merriam-webster.com/dictionary/fiduciary. on behalf of our clients, and 2. we have no product conflict of interests. Meaning we do not “sell” products where we could be compensated more for one product vs. another. We are also not told what to offer, or have anyone over us to establish quotas.
Most people I talk to assume this relationship exists between all investment advisors and their clients. Unfortunately that is not the industry standard.
Here is one example that has been posted on Twitter https://twitter.com/QTRResearch/status/1123988828807671810. regarding a popular online brokerage.
First we have this communication to Fidelity account holders where Fidelity is “pleased to announce…” an opportunity to invest in a new offering by Tesla. Sounds good…
Until you discover this…
You see that Fidelity is dumping Tesla stock from their mutual funds, while simultaneously offering Tesla stock to their investors. Now that is a conflict of interest!
The lesson? If you truly want independent investment advice, find a truly independent investment advisor. Otherwise, the sad industry truth is that the retail investor in the brokerage world exists for the sole purpose of providing liquidity to the institutional clients.
Mr. DeShurko is the Managing Member of 401 Advisor, LLC an independent registered investment advisor. He is also a registered representative of Ceros Financial Services, Inc. (Member FINRA/SIPC). Ceros is not affiliated with 401 Advisor. The views expressed are those of Mr. DeShurko and do not necessarily reflect those of Ceros Financial Services, Inc., its employees or affiliates.
Past performance does not guarantee future results. There is no guarantee that any investment or strategy will generate a profit or prevent a loss.
