Wiser Advice 101

How is Wiser different from a Stock Broker or Bank?

Wiser Wealth Management has a fiduciary responsibility to act in the best interest of its clients at all times. Brokerage firms generally are not fiduciaries to their clients and therefore may not make decisions that are solely in their clients best interest.

Wiser Wealth Management provides its clients with a Form ADV that describes exactly how we do business and obtains our clients consent to any conflicts of interest that may exist in our business. Brokerage firms are not required to provide clients with any comparable type of disclosure.

Wiser Wealth Management charges our clients a fee negotiated in advance and cannot earn any other profits from their clients without the clients’ prior consent. We charge an asset-based fee, so that our interest are aligned with our clients. Brokerage firms’ revenues may increase even if the customers’ assets shrink.

Wiser Wealth Management manages money in the best interest of our clients. We do not engage in business activities like investment banking or underwriting, which brokerage firms do. These other businesses may cause a brokerage firm’s interest or attention to focus on other areas of the firm outside of their retail brokerage business and clients

What are the advantages of working with Wiser over a Stock Broker or Bank?

Wiser Wealth Management is held to a higher standard than stockbrokers when it comes to putting investors’ interest first and doing the right thing for our clients’ investments. Independent RIA’s have a fiduciary duty to their clients which means we must:

  • Act in the best interest of our client
  • Identify and monitor illiquid securities
  • Employ fair market valuation procedures where appropriate
  • Observe procedures regarding the allocation of investment opportunities: including new issues and the aggregation of orders
  • Have policies regarding affiliated broker-dealers and maintenance of brokerage accounts
  • Disclose all conflicts of interest
  • Have policies on use of brokerage commissions for research
  • Have policies regarding directed brokerage, including step-out trades and payment for order flow
  • Abide by a code of ethics

Stockbrokers are held to suitability obligations on the part of their broker dealer:

Reasonable Basis Suitability – the broker dealer must believe that the recommended security is suitable for any investor

Customer Specific Suitability – the broker dealer must believe that its recommendation is suitable for that particular investor.

Have more questions? Email us at [email protected] or Contact Us.

By Published On: July 24, 2009

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