Your financial advisor: just a car salesman?

Retro Car Salesman C

Is this your financial advisor?

Wall Street is trying to prevent new rules that would require financial advisors to put your interests ahead of their own. Big brokerage firms have said they simply won’t serve the middle class if they can’t offer conflicted advice to them. Even more telling, MetLife Inc. CEO Steven Kandarin recently used a car salesman analogy that compares financial advisors to Ford and Chevy dealerships. Car salesman aren’t required to point out the better deal across the street, Kandarin asked, so why should financial advisors?

If you think the people advising you about your life savings should only be held to the standards of car salesmen, then do nothing. If you think they should be held to a higher standard, contact your Congressional representatives now:

http://www.usa.gov/Contact/US-Congress.shtml

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Comments

  1. Liz,
    I agree with your sentiments with respect to many stockbrokers and insurance/annuity salespeople, many of whom refer to themselves as financial advisors. However, your readers can infer that all financial advisors are snake oil salespeople from the way you wrote your column. In fact, many Registered Investment Advisors (RIAs) are held to the fiduciary standard; meaning that the advice they provide to clients must be in the best interest of the client. Others in the financial services industry are held to the suitability standard, which is measurably and legally lower than the fiduciary standard. I am a fee-only CPA Financial Planner who is held to the fiduciary standard and I take that responsibility very seriously. Almost all of my colleagues are held to the same standard. I think that this difference should be adequately explained to your readers .
    Thank you.
    Mitchell Freedman, CPA/PFS (Westlake Village, CA)

    • Liz Weston says:

      Which I’ve done, repeatedly. A search on my name and “fiduciary” will turn up enough posts and columns to keep readers busy for many, many days. Most financial advisors are not held to a fiduciary standard. In my view, all of them should be.