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The Institute for the Fiduciary Standard

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New SEC Videos Aim to Help Investors Identify Brokers vs. Investment Advisers

By Knut Rostad on August 16, 2019

Originally posted on InvestmentNews by Mark Schoeff.

Investors trying to decide whether to hire a broker or an investment adviser can now turn to the Securities and Exchange Commission’s website, where the agency posted videos on Thursday designed to highlight the differences between them.

The five videos, which total approximately 14 minutes and are hosted by SEC Chairman Jay Clayton, walk viewers through the services and costs associated with each business model.

In the videos, Mr. Clayton breaks it down this way: Brokers make recommendations on investment-product transactions, while advisers can provide the same guidance but also manage investment accounts on an ongoing basis. He also briefly mentions that many financial professionals are both brokers and advisers.

“We at the SEC want you to be armed with the information to ask the right questions and make the choices that are best for you — whether that means going with an investment adviser, a broker or a combination of the two,” Mr. Clayton said.

The videos, which were produced in-house at the agency, are part of the SEC’s investor education campaign it launched after approving earlier this year a regulatory package designed to raise investment advice standards.

In the video, Mr. Clayton says the new rules “prohibit brokers and investment advisers from putting their interests ahead of your interests.”

The videos received a mixed immediate reaction.

For the full version, visit InvestmentNews.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture

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