FAQs

A. Brokers are generally not considered to have a fiduciary duty to their clients. Brokers are required to: 1) know their clients’ financial situations well enough to understand their financial needs, and 2) recommend investments that are suitable for them based on that knowledge. Brokers are not required to provide upfront disclosures of the same type provided by advisors, including, but not limited to their conflicts of interest.

Advisors, on the other hand, are subject to a standard known as the fiduciary duty. This means they have to put your interests ahead of theirs at all times by providing advice and recommending investments that they view as being in your best interest. Advisors are also typically required to provide up-front disclosures about their qualifications, what services they provide, how they are compensated, possible conflicts of interest, and whether they have any record of disciplinary actions against them.

A: The CFP® indicates that the financial advisor is especially knowledgeable in personal financial planning issues. Areas of focus for a CFP® include ethics, insurance planning, risk management, employee benefits planning, investment planning, income tax planning, retirement and estate planning.

A: The CFA signifies that a financial advisor has a comprehensive understanding of securities and financial instruments. Areas of focus for a CFA include ethics, economics, quantitative methods of analysis, financial statement analysis, corporate finance, equity investments, fixed income investments, derivatives, alternative investments, and portfolio management.