Financial Symmetry News & Views » financial advisor

Compromised Brokers

bramsay — Thu, 12 Nov 2009 21:46:07 +0000

Morgan Stanley Smith Barney is offering as much as 330% of a brokers annual production to join the firm.

Click here to view the article from Investment News: “Morgan Stanley Smith Barney pumps up recruiting packages to lure top producers.”

With all the problems that big Wall Street firms caused for the global economy, it is absolutely stunning that they would continue to behave in such a way. Apparently the company expects the brokers to generate even more revenue from their clients to rationalize such a huge bonus.

Arrangements like these put far too much pressure on the brokers to seek more and more revenue from their clients which may cause them to be unable to tell if they are acting in their clients best interests. Most of the public does not realize that there is a huge range for a brokers’ commission depending on the product sold to a customer. For example, a $100,000 deposit could have a range as wide as $3000 to $10,000 in commissions.

This is not a new problem. In 1940, the Investment Advisors Act was enacted to draw a clear bright line between conflicted sales people and advisors who are required to act in their clients’ best interests.

Unfortunately since then the big Wall Street firms have worked diligently to blur the line. In fact most of their brokers can put on one hat to tell customers that they are investment advisors, and then change hats and behave like a broker.

At Financial Symmetry we fully embrace the Advisors Act and strongly recommend that the public seek out those who act exclusively as Investment Advisors rather than brokers or hat switchers. You can look up whether a firm is a Registered Investment Advisor at the SEC site here: Investment Advisor Public Disclosure, and you can weed out brokers as they will be listed here: FINRA BrokerCheck. Hat switchers will be listed in both places.

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Bill Ramsay Quoted in Investment Advisor

bramsay — Thu, 12 Nov 2009 08:27:24 +0000

Bill Ramsay, CFP®, was recently quoted in the November 2009 Investment Advisor magazine.

In the cover story “Reassessing Risk” by Olivia Mellan, Bill discusses his views on risk tolerance:

“My experience is that many people’s tolerance is directly correlated with recent market performance, so we shy away from questionnaires. I’m also wary of the way people can misjudge odds due to things like familiarity bias or the structure of questions.”

…

“We then discuss with clients how that [performed] under different market conditions, and look for their wince point to gauge whether their tolerance is lower than their capacity. If their tolerance is lower, we’ll lower the max equity exposure.”

Click here to read the entire story on InvestmentAdvisor.com.

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Bill Ramsay Participates in TBJ Roundtable

bramsay — Mon, 09 Nov 2009 20:38:16 +0000

Bill Ramsay, CFP®, recently participated in his third Triangle Business Journal roundtable event. The 2009 Financial Roundtable: Wealth Strategies was held at the Triangle Business Journal office on September 29th, 2009, with the full article appearing in the October 16th, 2009 issue.

Bill also participated in the Triangle Busniess Journal’s rountables on August 23, 2007 and July 18, 2006.

Please contact our office at (919) 851-8200 for a copy of the full article.

Paid subscribers of the Triangle Business Journal may click here to access the full article through their website.

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Fiduciary vs. Suitability

csmith — Thu, 05 Nov 2009 21:30:51 +0000

Understanding the difference between a fiduciary standard and a suitability standard could pay major dividends in a relationship with a financial professional. Operating under the fiduciary standard requires a planner to put the client’s interest ahead of his or her own. In other words, don’t be afraid to ask your financial advisor the motivation behind his or her recommendations. Recently, the FPA in a combined effort with NAPFA and the CFP Board have made a big push to have the fiduciary standard applied to securities brokers that give investment advice as well. In this msn.com article, Liz Pulliam Weston does a nice job breaking down the differences between these two words and lists some questions you might like to ask your advisor.

Can You Trust Your Financial Advisor?

Written by Chad Smith, CFP®.

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Allison Berger, CFP, becomes NAPFA approved fee-only planner

admin — Fri, 01 Jun 2007 17:54:36 +0000

Allison Berger, of Financial Symmetry Inc., in Raleigh, NC, has been accepted for membership in the National Association of Personal Financial Advisors (NAPFA).

Membership in NAPFA is granted only to Fee-Only financial advisors who are paid directly by their clients. NAPFA members receive no commissions or other rewards for selling financial products. Those forms of compensation create potential conflicts of interest that may serve to undermine and advisor’s objectivity and fiduciary responsibility. It is for this reason that all NAPFA members must sign a Fiduciary Oath, in that they explicitly promise to “place the client’s interest first.”

In addition to tough standards on client-friendly compensation, NAPFA has some of the industry’s most rigorous education and training requirements. All candidates for membership are required to submit a complete comprehensive financial plan for a full-scale peer review. Furthermore, NAPFA’s continuing education requirements exceed those of any other association of financial advisors.

“Allison Berger is a welcome addition to our organization,” said NAPFA Chair Richard Bellmer, a financial advisor in Indianapolis, IN.

“Membership in NAPFA denotes a real accomplishment for any financial advisor. We recently surpassed 1,300 members, and are always pleased when we can strengthen our ranks with well-trained, highly-committed financial advisors.”

Bellmer continued: “Our mission for more than 20 years has been to provide comprehensive, client-centered advice to individuals and families. Our services are provided in a fee-only manner, with no sales of any products, and with full disclosure of any possible conflicts. The superior nature of this type of financial planning is widely recognized by the leaders of the financial services industry and the media.”

Read more about Fee-Only financial planning and NAPFA or call 1-800-366-2732.

Read more about Allison Berger, CFP, on the Financial Symmetry website.

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Chad Smith, CFP, Joins Leading National Organization

admin — Sun, 27 May 2007 17:39:58 +0000

Chad Smith, of Financial Symmetry Inc., in Raleigh, NC, has been accepted for membership in the National Association of Personal Financial Advisors (NAPFA).

In addition to tough standards on client-friendly compensation, NAPFA has some of the industry’s most rigorous education and training requirements. All candidates for membership are reuired to submit a complete comprehensive financial plan for a full-scale peer review. Furthermore, NAPFA’s continuing education requirements exceed those of any other association of financial advisors.

“Chad Smith is a welcome addition to our organization,” said NAPFA Chair Richard Bellmer, a financial advisor in Indianapolis, IN.

Bellmer continued: “Our mission for more than 20 years has been to provide comprehensive, client-centered advice to individuals and families. Our services are provided in a fee-only manner, with no sales of any products, and with full disclosure of any possible conflicts. The superior nature of this type of financial planning is wideley recognized by the leaders of the financial services industry and the media.”

Read more about Fee-Only financial planning and NAPFA or call 1-800-366-2732.

Read more about Chad Smith, CFP, on the Financial Symmetry website.