Financial Advisors at North Star Financial Group
Over the last decade, the Investment Industry has seen many changes; particularly in firms that sell investment accounts and those that advise based solely on suitability and merit. Unfortunately, regulators have done a poor job at requiring banks and broker-dealers to follow the same fiduciary standard which has always applied to Registered Investment Advisory Firms. Many broker-dealers and banks sell proprietary products and make markets in certain securities and simultaneously operate a Registered Investment Advisory Division.
Simply stated, there is a stark contrast between the many different types of advisors which can best be described by two words: fiduciary and suitability. While both are accepted business models in the Investment Industry, the conduct of each is markedly different. For example, a registered person acting under suitability (Broker-Dealer, Banks) standards could fulfill your goal of a Bond Fund without regard to cost or compensation – even if another fund of equal quality and lower cost existed – and that is perfectly legal. Conversely, Registered Investment Advisory Firms have long been required to adhere to the fiduciary standards and abide by the principles of fiduciary duty:
- Client’s interests are always ahead of the Advisor.
- Always act with prudence; therefore skill, care, diligence and good judgment shall be used at all times.
- Full disclosure; which includes all facts, fees, conflicts of interest, and substantial changes within a firm that affects its ability to accurately and fairly advise clients.
- Avoid making a market in certain securities or maintaining inventories from which to sell or buy.
- Provide unbiased advice at all times.
- Alignment with clients Investment Policy Statement and stated goals and objectives.
