San Diego Fiduciary Advisor

Your best interests come first. That’s what happens when you have a San Diego Fiduciary Advisor by your side. But you may be surprised that under the Suitability Standard, your interests can sometimes take a back seat to your advisor’s. Rick Ferri has a good story that illustrates the differences vividly:

“When I was a broker during the 1990s, the firms I worked for encouraged us to sell their proprietary mutual funds. Many competing funds were more appropriate and lower cost, but we were told to recommend in-house funds first.

This sounds improper, but it is not a breach of the suitability standard that governs a broker’s advice. The liberal suitability standard allows a broker to sell in-house financial products as long as the broker can show that they are suitable for a client based on the circumstances. However, being suitable for a client is decidedly not the same as being the best available choice for that individual.

By law, a broker is not a Registered Investment Adviser (RIA), so they do not fall under the stricter fiduciary standard that RIAs must follow. The fiduciary standard is a much higher standard of care than suitability…”

Under the Fiduciary Standard, your advisor is obligated to always watch out for your best interest first and foremost, meaning that if a lower cost alternative existed for a certain product, that’s what you would be recommended, even if it meant not getting that commission. When that conflict is removed, the advisor that operates under the Fiduciary Standard doesn’t have his or her judgment clouded by the sales commission. That means the investment advice you’re getting has a greater chance of being free of bias and is being chosen for you based on its own merits, not because it pays the advisor more.

Please contact us for more information on the duties of a San Diego Fiduciary Advisor from Parabolic Asset Management:(619) 888-4070.


San Diego Fiduciary Advisor