#certifiedfinancialplanner

Don’t be fooled if you’re told the labels “Advisor” and “Broker” are roughly synonymous. The differences between these two terms are broad and very important. Here’s why:

1. Fiduciary Status – Brokers must act in the best interest (“best interest” standard) of the client at the time the recommendation is made (this is more of a transactional relationship), and the broker needs to take into consideration only the brokerage accounts available (not the overall relationship). Advisors are held to the higher “fiduciary” standard, meaning they must always act in their client’s best interest.
2. Conflicts of Interest – Brokers are mainly compensated by commissions paid out on investment products they recommend to their clients. They can offer proprietary products and the broker-dealer can place material limitations on the menu of products the broker can offer. If that seems like an inherent conflict of interest, that’s because it is! A fee-only advisor is agnostic to the investment products used when managing assets.
3. Compensation Structures – Since broker compensation is often tied directly to a product recommendation or sale, there can be a natural incentive to recommend products with higher commissions as long as there are other factors about the product that reasonably allow the broker to believe it is in the best interest of the client. Advisors are compensated mainly by an agreed upon fixed fee that is not tied to any investment product. A fee-only advisor does not sell products.
4. Services Provided – A broker’s scope of services is generally much narrower and limited to recommending specific investments to clients, with some offering educational services. Advisors offer holistic services extending beyond investment recommendations, including social security analysis, pension election analysis, insurance reviews, tax planning, and financial planning.
5. Disclosure vs. Transparency – Broker disclosures are often long, lengthy, hard-to-read legal documents that even a financial professional would have difficulty understanding. Brokers must identify and at a minimum disclose conflicts of interest (note this does not apply to associated persons of the broker-dealer). Advisors adhere to higher standards of transparency and are legally required to provide their clients with their Form ADV, which is a disclosure brochure explaining the structure of their firm, what services they offer, and what they charge. Advisors must eliminate and disclose conflicts of interest and fairly manage unavoidable conflicts in the client’s favor.

CFP® professionals are committed to acting in your best interest. That’s why It’s Gotta Be A CFP®. Reach out to one of our Certified Financial Planner™ professionals if you would like to discuss how BFSG can help.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

BFSG’s CERTIFIED FINANCIAL PLANNER™ professionals, Michael Allbee, CFP® and Paul Horn, CFP®, CPWA®, were invited to be guest speakers for the “It’s Your Money!” workshop series. For the “Investment World” session, Mike and Paul focused on how the investment world gets compensated. Learn the differences between brokers versus advisors, what does the word “fiduciary” mean, how to find an advisor, and most importantly how certain products are sold, and the way brokers/dealers are paid. Watch the replay by clicking here.

The “It’s Your Money!” workshop series is hosted by Peter Kote for his not-for-profit Financial & Estate Literacy. These workshops educate seniors to take control of their #financial, #estate, and #charitablegiving decisions.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Please join us in welcoming Henry VanBuskirk, CFP® to Benefit Financial Services Group. Henry joins BFSG as a Wealth Manager. He will be working with our clients to help them realize their short and long-term goals by delivering personalized financial plans and retirement analysis. Previously, he worked as an Investment Analyst for an advisor in Woodland Hills, CA. Henry graduated from the University of California, Santa Cruz with a bachelor’s degree in Mathematics and from California Lutheran University with a Master’s degree in Business Administration. He is a CERTIFIED FINANCIAL PLANNER™ professional. We are looking forward to the positive impact he is going to make at BFSG and for our clients. Welcome Henry!

Please join us in welcoming Crystal Kessler, CFP^® to Benefit Financial Services Group. Crystal joins BFSG as a Wealth Manager / Financial Planner. She will be working with clients to help them realize their short and long-term goals by delivering personalized financial plans and retirement analysis. Previously, she worked as a Wealth Advisor for a Registered Investment Advisor in San Diego, CA. She graduated with a Bachelor’s Degree in Economics from California State University, San Marcos and is a CERTIFIED FINANCIAL PLANNER™ professional. We are looking forward to the positive impact she is going to make at BFSG and for our clients.