On Jan 29, 2:31*pm, Don <dwz...[at]telus.net> wrote:
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Agree completely. There are bad apples in every bunch. The only
protection is education, due diligence, and caveat emptor.

On 2008-01-29 06:52:56 -0800, kastnna <kastnna[at]auburnalum.org> said:

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On 2008-01-29 06:52:56 -0800, kastnna <kastnna[at]auburnalum.org> said:

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I guess whether "many" is appropriate or not is questionable, and I
certainly do not know of any statistics as to what percentages of
"advisors" go bad, or even how many advisors of various types there are
to choose from in the first place. I am certain as can be, however,
that the number is not so small and insiglnificant as to be of no
concern to someone seeking financial advice. Selection of a person to
give financial advice, I am sure, carries with it a substantial degree
of risk. Without due diligence, that is just more unnecessary risk on
top of the risk of various investment products themselves.

On Jan 26, 1:54*pm, daben <dabe...[at]yahoo.com> wrote:
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I think you are misunderstanding the application of fiduciary duty.
All other things being equal, you are not going to find one company
that has a fiduciary duty and another that does not. Fiduciary duties
are not chosen by investment firms, they are requirements for given
situations (almost universally). For example, the trustee of an
irrevocable trust has a fiduciary duty to act in the best interest of
the trusts beneficiaries. He/she doesn't get to choose whether or not
they have a fiduciary duty based on the firm they represent. In that
situation, even a non-professional trustee (like a family member) has
a fiduciary duty. Certain types of financial arrangements are covered
under FD and certain types are not.

To help with your real problem, selecting an advisor, I offer this:
make any advisor explain themselves thoroughly and on every signifcant
point. If they can't or won't they are not the right guy. Why you ask?
Because the reason they don't explain is that they don't understand
the concept themselves (which is bad) or they know that explaining it
will make it clear that it is not in your best interest (which is also
bad).

And while I might not like Don's unsubstantiated use of the word
"many" his warning signals are all excellent indicators also.

On 2008-01-28 16:13:52 -0800, eagent <gene[at]alliancetax.com> said:

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Unfortunately, many people do not exercise that diligence, and even if
they do, it often can be hard to tell if an advisor has one's best
interest at heart. But I can think of a few clues and danger signals.

If an advisor immediately recommends some particular investment without
knowning much at all about your financial situation, employment, taxes,
previous debts, etc., it is a serious danger signal.

If an advisor appears to be exclusively concerned with a single type of
investment, for example, the stock market, and doesn't seem to care
about anything else, for example, home ownership, I would want to look
for someone with a broader perspective.

If an advisor keeps emphasizing that you owe him or her nothing for the
advice given, that is reason to stop and think. Remember the adage "He
who pays the piper calls the tune."

The last point is especially relevant if the advisor invites you to a
special meeting where free food and drinks are given out and then you
listen to a speaker telling you about some fabulous investment
opportunity. Guess who will eventually pay for all tlhe food and
drinks, the speaker's fee, and rental of the auditorium.

On Jan 26, 12:18*pm, Don <dwz...[at]telus.net> wrote:
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Noted and Agreed - this brings us back to the crux of the issue. HOW
does one tell if their advisor has their best interests at heart?
Every investor should exercise due diligence - do your homework, make
sure you understand the product, get to know your advior and remember,
in the end, when the dust settles - ITS YOUR MONEY and YOUR DECISION.

Gene E. Utterback, EA, RFC, ABA

Tad

IO am considering being a client of the form (actually for my
parents). They inherited a large (for them) sum of money and are near
retirement. I was looking for a firm that would look out for their
best interest and have bee told that a firm with fiduciary
responsibility is probably the best. I am also having my attorney
look into them.

daben

On Jan 24, 9:41 am, Tad Borek <bore...[at]pacbell.net> wrote:
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On 2008-01-23 11:04:09 -0800, eagent <gene[at]alliancetax.com> said:

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Just a small addition: Many advisors who are bound by the legal
parameters of fiduciary duty STILL DO NOT put their clients needs first.

daben wrote:
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Daben, are you considering working there, or being a client of the firm?

-Tad

On Jan 23, 11:45*am, kastnna <kast...[at]auburnalum.org> wrote:
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Agreed, but with my 2 cents added in -

We also have to keep in mind that it can be difficult to measure
compliance with a fiduciary duty because the nature of the
relationship is subject to interpretation and application and requires
untold amounts of personal preference. I like investment company A
because I DO and as long as that company's investment is in line with
your goals I probabaly have met my fiduciary duty in recommending that
investment - EVEN if company B may be better for someone reason - EVEN
if I'm not aware of company B's existence at all.

AND while a fiduciary responsibility may be created by a matter of law
or regulation, most people won't know that it wasn't properly
exercised until it is too late.

Additionally, just because a fiduciary duty does exist as a matter of
rule of law DOES NOT MEAN that your best interests are not forefront
in the professional's mind. Many advisors who are NOT bound by the
legal parameters of fiduciary duty STILL put the client's needs first.

The important thing to remember is this - Caveat Emptor or Buyer
Beware - the best defense you can have is a thorough understanding
FIRST of your goals, then of the recommendations you get and how they
fit in your portfolio.

Lastly, I would make one small change to Kastnna's final paragraph by
saying Whenver you enter into an engagement of ANY KIND WITH ANY ONE,
it is certainly reasonable to have your agent thoroughly explain
themselves and if they cannot do so to your satisfaction, then take
your business elsewhere.

Gene E. Utterback, EA, RFC, ABA

On Jan 23, 4:15*am, daben <dabe...[at]yahoo.com> wrote:
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What do you mean? A fiduciary duty exists when an appointed agent is
legally bound to in the best interest of the principal. Depending on
the services being performed a fiduciary duty may or may not exist.
Furthermore, you don't get to choose when it does and doesn't.
Trustees, board members, real estate agents, and a wealth of other
individuals are held to a fiduciary duty.

Fiduciary duties are extremely important but the level of dilligence
applied by each firm is difficult to measure (which is what I THINK
you are asking). I would consult friends, family, and associates that
you respect as to whom they use.

If you enter into an engagement where a fiduciary duty does exists,
understand that it is not unreasonable to have your agent thoroughly
explain their actions. If he/she cannot explain why his
recommendations are best for you and why the alternatives are not,
then run.

All

I am considering a CPA / Investment firm. My question is about
Fiduciary responsibility: How important is it when choosing a firm?

thanks
daben