Investment Advisers and Brokers: Who Has a Fiduciary Obligation?

by | Apr 15, 2013 | Asset Management, Videos


It is astounding how many investors don’t know what a fiduciary obligation is. In this video Tom and Brendan talk about fiduciary obligation and what it means. Investment advisers have a fiduciary obligation to their clients. This means that they must exercise prudence when giving their clients advice. Their advice must also be suitable for that client and their investing goals. On the flip side, a broker does NOT have a fiduciary obligation to their clients. Brokers must meet a presumption of suitability. The standard that investment advisers are held to is more strict than that. A lot of investors don’t even know what a fiduciary obligation is, so in turn they don’t understand who has one.

For investors that do understand what a fiduciary obligation is and who has one, it still might be tough to draw clear cut lines between brokers and investment advisers. This is because brokers sometimes work under different titles. They do this to make the differences between themselves and advisers less clear. It is important that you understand who you invest your money with, and if they have a fiduciary obligation to you. You can learn all about fiduciary obligations and more differences between investment advisers and brokers in this video.

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