A new rule by the SEC comes out next month. It’s called the Regulation Best Interest Rules and it is supposed to help reduce confusion about professionals who help manage peoples’ finances.
The rule goes into effect in June.
Currently anyone can call themselves an advisor.
Under the new rule only fiduciaries can do so.
A fiduciary is someone who is required by law to act in a client’s best interests.
Currently most advisors work in their own best interest and stick their clients with products that are best for the advisor and the company he works for. Meaning the products with the highest fees and commissions.
So if you are using a company to help you with your assets, whether it is a large bank or part of a stock broker, than you are NOT using a fiduciary. Companies like Ameriprise and Edward jones are not fiduciaries. Their agents are looking out for themselves first, second, and third.
And you are probably getting screwed.
In my upcoming book, I included a chapter about just how planners and advisors have been screwing over their clients, but I didn’t have room to go into all the details so I decided to include a free bonus with the book that goes much deeper and what I uncovered which doing research was shocking.
As far as this new rule goes, the one thing it changes is who gets to call themselves an advisor.
Big deal. The ones that are not fiduciaries will simple change what they call themselves.
Many already get certified as financial planners. Or they call themselves financial consultants, or chartered wealth advisors, or retirement consultants, or wealth managers.
It is just semantics. A play on words to trick the public and this rule will do nothing to help with the confusion.
And if that wasn’t enough, there are many companies that are registered as fiduciaries and as brokers. And so all the people that work at the companies can call themselves advisors regardless of if they are looking out in the best interest of the client or not.
According to the SEC, there are 359 of these dually registered brokerage firms which hold more than 90 million accounts.
That is a lot of people getting screwed.
So how do you protect yourself?
Easy. Learn to manage your own investments.
Use index funds and low cost providers like Vanguard and TRowe Price.
Or just use index ETFs like SPY and IWM and QQQ.
But more than that, learn to sell options on the positions you have and you will never need to be dependent on an advisor or wealth consultant ever again.
Passive Trading is the path to freedom.
As I have said on many occasions, no one care about your money more than you do.
You work hard for it. Don’t just turn it over to someone who is only looking out for themselves.
There is a reason most financial planners are broke…if what they preached worked wouldn’t they all be retired?
You know the answer and Passive Trading is the path…are you ready to proceed?
Check out the free training at passivetrading.com
And always trade with the odds In your favor!