S.E.C. Tells Brokers to Work for You, but Don’t Skip the Fine Print

Fee-only pros are not compensated when they sell you something. Instead, they will receive a flat fee, an hourly charge, or payment calculated as a percentage of the assets they manage for you. It’s clean and transparent.

Another option: certified financial planners, a professional designation with rigorous curriculum and experience requirements. They pledge to act as fiduciaries when providing financial advice and can lose their designation if their self-governing board discovers they have not.

You can find these types of professionals through the following associations: The Garrett Planning Network, the National Association of Personal Financial Advisors and XY Planning Network. Roboadvisers — which provide automated advice, sometimes with human help — are another alternative.

If the brokerage firm that your adviser works for will not permit them to use their certified financial planner credentials, that is a huge red flag.

The pledge

Then there’s the ultimate test: Ask your advisers to sign a fiduciary pledge, which states that you expect them to put your interests first all of the time, with all of your money, in all of your accounts.

Any disputes you have — with brokers and advisers alike — are likely to be settled in arbitration anyway. But having a signed pledge in your back pocket, experts have said, can only bolster your case.

Article source: https://www.nytimes.com/2019/06/06/your-money/sec-broker-rules.html?emc=rss&partner=rss