Thomas-Batterman

Our firm provides Fee-Only fiduciary advisory services to individuals, mutual insurance companies and others who do not feel they have the time, interest or expertise to properly attend to their investment matters for themselves.  Clients delegate the responsibility of proper investment selection, cost-effective acquisition and ongoing monitoring and due diligence to us, freeing them to spend time on things they find more interesting, enjoyable or important to them.  Acting as a client’s fiduciary, we are obligated to make the decisions for them that we would make if we were investing our own money, bringing our years of specialized professional training and experience to bear on those decisions.

The kind of relationship with a financial advisor described above is uncommon and, in fact, would be ill-advised with most individuals calling themselves “financial advisors”.  Let me explain why.

In the financial services industry there are two types of licenses available – a license to sell investment products and a license to provide advice.  Most “financial advisors” possess a license to sell investment products.  The primary interest of such individuals is to get you to buy what they are selling because that is how they make money.  The advice they offer is really nothing more than a disguised sales pitch to lead you to the conclusion that you need to buy what they are selling.  Unfortunately, many investors do not understand this important fact which bears directly on what the “recommendations” they are receiving.  They are misled into believing that they are being “advised” rather than “sold” and therefore do not approach such an advisor’s “advice” with an appropriate and adequate level of apprehension.

Advisors licensed to provide advice, on the other hand, are held to a fiduciary standard, meaning they are obligated to protect your best interests with their advice.  It would seem, then, that if you don’t really fully understand what you are doing and are truly looking for professional advice instead of a disguised sales pitch, that you would simply seek out a “fiduciary advisor” licensed to provide advice and you’d be in good hands.  Unfortunately, it would be nice if it were that simple.  It is not.

An increasing number of organizations possessing licenses to sell product are setting up sister organizations licensed to provide advice.  When the “advisors” employed by these so-called dual registrants provide advice to you through the entity licensed to provide advice, they are in fact obligated to undertake a fiduciary obligation to you.  The problem is that product transactions for you are primarily, if not entirely, executed through the sister entity licensed to sell products.  There is no independent, objective review of these transactions to ensure they were truly necessary and that the pricing of the transaction was fair to you. This gross conflict of interest creates the same potential f