A Fiduciary, not a Broker
REQUIRED OF INVESTMENT ADVISOR REPRESENTATIVES
In its July 2004 Bulletin, AARP defined a “Fiduciary” as “being the person working for you who owes you the highest possible duty of care and loyalty, so that a relationship of trust and confidence exists between you and the financial planner. While you may think that this sort of trust and confidence will naturally exist, a fiduciary relationship usually depends on the facts and circumstances of a particular situation.
AARP went on to state that “Many brokers will not accept fiduciary responsibility. They may already have a fiduciary relationship with their brokerage firm that can conflict with their duty to you. That usually means you would truly be in a “buyer beware” relationship should you do business with this person, because you are then assumed to be knowledgeable enough to watch out for yourself when it comes to investments. If that’s the case, you should know upfront. Or, you may wish to work only with professionals who are always fiduciaries to you.”
Guardian Retirement Services provides financial counsel in the area of securities as an Investment Adviser Representative. Under US Federal securities law, this title demands that Guardian Retirement Services is fully subject to a fiduciary duty. This means they have to put your interests ahead of theirs at all times. This is done by providing advice and recommending investments that they view as being in your best interest.
Investment Adviser Representatives, such as Guardian Retirement Services, must also provide up-front disclosures about the following:
1) Their qualifications
2) The services they provide
3) How they are compensated
4) Possible conflicts of interest
5) Any record of disciplinary actions against them.
Brokers, on the other hand, are not required to have the same complete fiduciary duty to their clients. Instead, brokers are required to:
1) Know the financial situation of a client enough to comprehend financial needs and
2) Make “Suitable” recommendations accordingly.
Brokers do not have to provide upfront disclosures of the type provided by investment adviser representatives, including, but not limited to their conflicts of interest.
