What are the ethical standards to which financial advisors are held?

Financial advisors are held to one of two standards: the fiduciary standard or the suitability standard. The fiduciary standard, which we have always embraced, requires that we make recommendations which are in your best interest.

The suitability standard, which commission-based advisors are most often required to observe, requires that the investments being recommended to you must be suitable, but it does not mean you will pay the lowest commission. Some or all of a broker’s income may be dependent upon steering their clients to a limited slice of the thousands of financial products available. How do you know which of these two standards your advisor follows? Ask, and expect a plain and simple answer.