MarketWatch: When financial ‘advice’ is really a sales pitch


Article Link:



  • The article discusses differing views on the Department of Labor’s effort to increase transparency and accountability in the financial services industry regarding investment advice.
  • A table in the article separates providers of financial advice into four categories; 1) brokers; 2) registered investment advisers; 3) insurance agents; and 4) dually registered advisers. The table provides a good summary of the products/services offered, how each group is paid, the regulatory standard followed and the primary regulator.
  • The article recommends that investors remain vigilant and should question or interview individuals that provide recommendations on financial products and conduct background checks of financial representatives on regulatory websites.
  • NOTE: this article was posted in the latter half of 2015, but we believe it remains relevant today.


Our Take

  • We firmly believe that all investment professionals should be required to act in the best interest of their clients. How financial representatives are compensated (and how much they are compensated) should be clearly disclosed to clients.
  • We encourage prospective investors to spend a significant amount of time interviewing and questioning their financial representative prior to hiring that individual to manage their money. Additionally, clients should interview a number of financial representatives for comparison purposes – how they are compensated, services offered, sample portfolios, etc.
  • Ask us about our questionnaire. We have developed an outline of key questions to ask when you are seeking to hire a financial representative and we have filled it out ourselves.