Who Are These People?Who Are These People?
RIAs Wirehouse Reps Obligation to Clients Fiduciary duty to act in clients' best interests at all times Can put his firm's interests first, as long as his recommendation is for the client Compensation Model Fee-based or asset-based Fee-based or commission-based Disclosure Must tell clients of any and all fees received as compensation for their services Disclosure rules are governed by a variety of
October 1, 2008
Carolyn A. Chandler, associate editor, Trusts & Estates
Hybrid Model
Advisors can be dually registered reps* — meaning they have taken the Series 7 examination and may make a commission on their sales and they have taken the Series 65 so they can be associated with an investment advisor and charge fees.
*Note: Because wirehouse broker/dealers are so heavily regulated, (by the SEC, FINRA and the states) most broker/dealers see no practical difference between an RIA's and a wirehouse representative's fiduciary obligation to their clients. Eric Schwartz, founder and president of Fairfield, Ohio-based Cambridge Investment Research, says, “The dually registered reps at [his] company hold themselves to a fiduciary standard at all the time regardl...
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