Investment Advisory Services
Investment advisors can include money managers, investment consultants, and financial planners. One thing all these jobs have in common, though, is that they are regulated by the US Investment Advisors Act of 1940. Enacted to address abuses that may have contributed to the market crash of 1929, the Act clarifies the fiduciary relationship that investment advisors have, and eliminates conflicts of interest between investment advisors and their clients.
Who are investment advisors?
An investment advisor is defined as any person or firm that is engaged in the business of providing advice, or issues reports or analysis about securities, for compensation. An investment advisor must meet all of these criteria to be defined as an investment advisor.
How do you know who is an investment advisor?
Any firm or individual that fits the criteria must register as an investment advisor with the Securities and Exchange Commission (SEC). There are some exceptions to registration. Some companies or individuals who may fit the criteria – like banks, bank holding companies, some lawyers and accountants, teachers, and some brokers and dealers – are exempt from registration. Any person or firm that is registered, however, must follow the fiduciary requirements of the Act.
What are the rules for registered investment advisors?
The Act provides a very broad fiduciary duty for registered investment advisors – they must act in the best interest of their clients. Investment advisors must avoid all conflicts of interest and can’t take unfair advantage of a client’s trust. Registered investment advisors must fully disclose any material facts to their clients and provide only suitable advice.
Your advisory relationship
FiduciaryFirst, LLC follows the high fiduciary standards set by the US Investment Advisors Act. We act in the best interests of our clients, based on their financial needs and investment objectives, and make suitable and appropriate recommendations or decisions on behalf of our clients. We would be happy to discuss our fiduciary standards and the services we provide with you. Contact us today for more information about FiduciaryFirst.
Tracking Number: 1-509510
This information was developed as a general guide to educate plan sponsors but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, the plan sponsor will be in compliance with ERISA regulations.