Recently, he pointed out that there was a very interesting article written by Jason Zwig in the Wall Street Journal, and many financial advisors were under pressure to satisfy the managers of the account. It may affect your advisor and invest your money in a way to reduce your return. If your advisor is exposed to this kind of pressure, it’s a clear conflict you need to know.
Zweig was quoted as Source Mark Ambrust, the highest executive of the New York financial advisor Armbruster Capital Management. His company manages about $ 900 million assets mainly for individual investors.
Investing advisors such as Ambrusters are responsible for protecting the assets of clients with qualified custodians. Casodians are responsible for processing transactions, maintaining records, generating account statements, and taking care of tax reports. Castian is generally a large -scale financial company division, such as faithfulness.
According to Ambrusters, Fidelity representatives called for at least $ 90,000. He also suggested how Amberstar produces this revenue. If Ambruster followed the recommendation of Fidelity’s representatives, as a result, Ambruster clients lost $ 90,000. Ambruster showed that he did not follow the recommendations of Fidelity’s representatives.
Zweig asked Fidelity to respond. “Fidelity does not require a specific action course to take one measure, and has some options for all (such management) clients. That was.
Michael Kits, a respected financial planner and journalist, is about extracting more profits between the clients of many Castodians and their financial advisor clients. It indicated that the conversation was happening.
I don’t know if this is a standard practice, but it was surprising to Zweig, a very knowledge financial analyst. If it is a general practice, regulatory authorities, such as the Consumer Protection Bureau of the Federal Trade Commission, will need to investigate this practice.
What does this mean for individual investors who expect financial advisors to invest in assets? The advisor invests assets in a way to minimize your earnings to meet the purpose of Casodians who are interested in maximizing income, rather than guarantee that advisors will continue to meet the client’s goals. You should not.
What can you do to protect yourself? You have the right to expect that your advisor is more interested in maximizing your income, not the income of the custodian he hires.
You should ask his adviser if he asks him to invest your assets in a way to maximize Casodian income than you. If the advisor shows that he has done this, you should ask you to refund your lost income and consider getting another advisor. If there is no refund, you need to consider legal measures. If your advisor has invested your assets in a way that satisfies Casodians more than you, you must definitely consider using another advisor.
Conclusion: Do not see if your financial advisor meets the needs of Castian more than you. In that case, you need a new advisor, or you need a new custodian for the advisor. Regulatory organizations need to investigate this situation. Advisors should not face such conflicts. Their responsibility is to satisfy you, not the custodian.
Elliot Raphaelson welcomes your questions and comments on raphelliot@gmail.com.
