March 2015: Advisor or Salesperson?

Posted by on Mar 4, 2015 in MFA Insights

Advisor or salesperson?  Clients may not know if their financial representative is subject to a weaker “suitability requirement” of the salesman or the stronger “fiduciary standard” of a Registered Investment Advisor (RIA).  Marin Financial Advisors is a RIA firm, regulated by the SEC and therefore subject to more transparency and laws that require us to put our clients’ interests ahead of our own.

Brokerage firms and banks including such well known firms such as Merrill Lynch, Morgan Stanley, Wells Fargo Advisors and UBS do not act as advisory firms.  Instead they are subject to the rules of their own self-regulatory organization (with its roots in NASD and FINRA).  Management of these firms and others are lobbying fiercely to avoid the fiduciary regulation that seeks to put their clients’ interest first.

Recently President Obama made news by directing the Department of Labor to simplify and improve the standard of care for investors in retirement accounts such as IRAs to the fiduciary standard.  Here is a link to an article from explaining the issue.  While MFA clients are covered, we understand that many of you care about someone who has a brokerage account at a firm like those mentioned above.

Feel free to contact us to discuss further this or other topics.