Every day, financial products are sold for a commission and include internal costs and fees which are difficult to find and define. The dollar value of these commissions and additional internal costs are usually deducted from the amount an investor invests in a financial product. The total return of such a product may therefore be reduced by the value of these hidden costs. In 2010, the Wall Street Journal brought this issue to the attention of the investment public with their article: “The Hidden Costs of Mutual Funds.” A further example of how low the bar is set for broker disclosure of costs and conflicts can be found within the article “Shining a Light on Murky 401(k) Fees.”
Since 2008, the U.S. Government has also begun to care about how financial recommendations are delivered to members of the general investing public. The lack of “self-policing,” protection of client interests and frequent scandals have led our legislative system to pass The Dodd-Frank Wall Street Reform and Consumer Protection Act. One goal of this legislation was the creation of a single standard for financial advice based upon the current fiduciary standard.
Today’s financial industry offers its clients a wide range of options. In our eyes, every client deserves to have their needs put first and solutions offered according to those needs. A Safe Harbor Advisor can help you to understand these options and work with you to decide how they might impact your specific financial needs.
Prior to meeting with a Safe Harbor Fiduciary Advisor, ask your current or prospective financial advisor if they are acting as a broker or an advisor.
Ask them to formally list all the areas in which they and their company can receive commissions. If they cannot or will not, we strongly urge you to consider whose best interests they have at heart.