Are fee based advisors held to the same SEC and FINRA standards that other investment professionals are held to? What is CFP? Are they objectively better at helping me navigate the financial investment market?
Fee-based financial advisors, such as registered investment advisors (RIAs), are held to the same standards as other investment professionals by the Securities and Exchange Commission (SEC). These standards include requirements for registration, record-keeping, and disclosure, as well as a fiduciary duty to act in the best interests of their clients.
In addition to being regulated by the SEC, some fee-based advisors may also be subject to regulation by the Financial Industry Regulatory Authority (FINRA), depending on their specific activities and the products they recommend.
Certified Financial Planner (CFP) is a professional designation awarded by the Certified Financial Planner Board of Standards to financial advisors who meet certain education, experience, and ethics requirements. CFPs are required to follow a fiduciary standard, which means they must act in the best interests of their clients.
Whether a fee-based advisor is “better” at helping you navigate the financial investment market will depend on your individual circumstances and needs. It may be helpful to work with an advisor who has a professional designation, such as a CFP, and who has experience working with clients with similar financial goals and circumstances to your own. It is also important to find an advisor who you feel comfortable working with and who you trust to act in your best interests.
