Did you know there were two standards in the personal finance profession? Fiduciary and Suitability. Hard to believe, but true. These are legal standards of care to you. Know the difference. It matters.
Simply put, fiduciary is the highest standard of legal care. With a fiduciary, the advisor works for the client first, then his company/firm. With suitability, the advisor is within the law to work for the company’s interests first, then the clients. This is a big deal.
Suitability is asking the car dealership what the best car is. Fiduciary is researching consumer reports.
Suitability is like asking a Yankees’ fan who the best team is. Fiduciary is asking an independent MLB analyst.
Suitability is asking a restaurant owner where the best food is. Fiduciary is consulting the food critic.
Viewed this way, who would ever choose suitability? Too many people. Unfortunately, most of them are unaware.
