The Importance of a Financial Advisor to Middle-Market Investors
By: Cort Bradbury
Saving and investing before retirement.
Americans planning for retirement should work with an advisor who will listen. Advisors should not be salesmen or force an agenda upon you. Instead, a financial advisor should collaborative and advise you objectively while you build a written financial plan and develop a path toward your goals. That’s right, a written plan. Some people do not have any financial plan or strategy.
Retirement savers are also entitled to choose the type of investment advice and support they need; how they engage with service providers, how to pay for advice and services. They are also entitled to a clear understanding of those agreements and to have their interests put ahead of any other interests.
New protections retirement savers and investors should know about.
The Securities and Exchange Commission’s (SEC) enacted the Best Interest standard to expand protections for savers by requiring that Broker-Dealers and their Registered Representatives put the client’s interests ahead of all other interests. It broadens the standard care from a “suitability” standard to the higher “best-interest” standard while preserving consumers’ access to valuable financial advice, services, and products.
What does Best Interest mean for everyday savers and investors?
It includes simplified disclosures in readily understood format, not more than four pages, that tell consumers the nature of the relationship, including duties and obligations of the investment professional, the fee structure and any material conflicts of interest.
With these updates, consumers have more options and choices available to meet their specific needs without foregoing personalized advice and services. Registered Investment Advisors (RIA) and certain other financial professionals, including Certified Financial Planners (CFP), are available for people who prefer fiduciary advice (and have account balances and portfolios to qualify for that level of service).
How government officials are responding.
Efforts to write separate rules and regulations by various states are unnecessary, causing more confusion and less access to services. Reg BI has been in effect since June 30, 2020, and its positive impact is now becoming apparent.
The U.S. Department of Labor is finalizing rules to align with Reg BI, and the National Association of Insurance Commissioners (NAIC) has adopted Model Law to align insurance products and services with Reg BI. These steps will provide all consumers with both the protections and transparency they need to access tools to help achieve their financial objectives.
Cort has been helping families, small businesses and professionals set and work towards their financial goals and objectives since 1993. He specializes in retirement planning, investment management, college funding strategies and life, disability and long term care insurance. A patient listener and caring professional, Cort fosters trust and loyalty and prides himself on building multi-generational relationships.