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What Is the Fidicuary Standard?

Published 10/24/2014

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THE WOODLANDS, Texas - The world of financial services has traditionally been built around products and services offered by a variety of brokers, advisors and insurance specialists. The differences between a stockbroker at a wall street firm and an independent registered investment advisor is often discussed but not always understood. An independent registered investment advisor (RIA) imposes a strong “fiduciary standard” on an advisor whereas the stockbroker model holds brokers to a less strict and less specific “suitability standard,” in which recommended investments must be merely suitable for a client.

“The fundamental difference between a fiduciary and a stockbroker is the basis of how he or she is compensated,” said Chris Rasberry, COO of HFG Wealth Management. “Typically a stockbroker, sometimes also referred to as ‘advisor’, is paid on the commissions sold to clients directly or within a ‘program’ of investments. On the other hand, a fiduciary wealth manager is usually paid a fee which allows him or her to spend time understanding what’s important to you and your family. Often this includes taking the relationship further by creating a comprehensive financial plan tailored to reach each of your various financial goals and objectives,” Rasberry said.

A “financial fiduciary” is held to a higher standard and is required, by definition, to place the needs of the client ahead of their or their firm’s own interest. Much like you would expect from a physician, attorney or certified public accountant, a registered investment advisor is bound by their governing entity to place the needs of their clients first.

The fiduciary experience is one where your objectives and desires are a top priority and the advisor helps you articulate and establish reasonable goals. This involves unbiased and rigorous research on the highest quality investment options available. Finally, this experience provides access to deep expertise and knowledge that delivers recommendations and a network of professionals and specialist to support your customized plan. Many financial advisors claim to offer such services, but the real challenge is putting together a complete picture of a balanced financial life, which is the true purpose of comprehensive wealth managers.

You are faced with an array of financial opportunities and responsibilities throughout your career and your life. HFG Wealth Management is committed to building a meaningful relationship with you that spans generations and helps you live a life you desire while helping achieve your financial goals. Should you know of someone who may have questions, please don’t hesitate to have them contact us

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