We’ve talked a lot in the past about the new fiduciary rules that will start to come into force in April, and just how important they are. While it seems like common sense that financial advisors should be required to put client interests first, this hasn’t been the case for most financial advisors (though McLean, as a Registered Investment Advisor, already uses the fiduciary standard—financial regulations are complicated).
While many of the brokers operating under the old (unlamented) “suitability” standard truly were trying to do their best for their clients, it’s crucial that we clean this up.
But I don’t want to make it seem like the fiduciary standard is a panacea. It’s emphatically not. It means that financial advisors need to put their client’s interests ahead of their own, but this doesn’t necessarily mean that the advice they give will actually be any good.
The advice (hopefully) will be less conflicted than it was previously, but it’s still limited by the skill and knowledge of the advisor that you are working with. And unfortunately, that tends to be pretty dismal.
The financial services industry is pretty well focused on selling everyone the next hot thing that will solve all of their financial problems (despite massively overwhelming data that you can’t systematically beat the market), and it’s better to not even talk about a lot of the attempts at financial planning that you see out there.
If you’re thinking about working with an advisor, make sure that not only do they follow the fiduciary standard, they should be able to provide you effective and meaningful advice on both your investments, but more importantly your entire financial situation.
For more on how McLean can do this for you, take a look at our ebook, “What McLean Can Do for You.”
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