By Glenn Leest

Did you know that there are two different sets of rules under which financial advisers operate; the Suitability Standard and the Fiduciary Standard? The biggest difference between the two is whose interests are put first. Source

The Suitability Standard:

  • An adviser can put their Broker/Dealers interest ahead of their client’s.
  • An adviser should generally know their client and should recommend investments that are mostly suitable to their needs.

The Fiduciary Standard:

  • An adviser must put their client’s interest first.
  • An adviser must operate with full transparency.
  • An adviser must not mislead clients; they are required to provide full and fair disclosure of all important facts.
  • An adviser must avoid conflicts of interest and must fairly disclose any unavoidable conflicts of interest.

Under the Suitability Standard, there isn’t a requirement to disclose conflicts of interest, or to put the client’s interest first.  Why is this problematic?  Think of it this way; if you needed a lawyer, would you hire someone who didn’t have to represent your best interests in the courtroom? To make this even more disconcerting, research clearly reveals that high-fee investments equate to lower performance over time. Source

The founding partners and advisers at Four Peaks Wealth Management are all fiduciaries. In addition, we own the same mix of assets as our clients, at the same prices. Our fees are based on a percentage of our client’s investment account value. Our financial incentive is the success of these investments for all of us.

Do you know which standards your financial adviser operates under? If you are not sure or want to understand more about the impact on your financial future, we offer a free consultation. Knowing the answer may, indeed, be a big deal.

Glenn Leest is a Registered Investment Adviser with Four Peaks Wealth Management. He is the President of both the Flagstaff Investment Club and the Noon Lions Club. Glenn has a passion for educating those in his community about investing and how to maximize their investing potential. Glenn can be reached at (928) 225-2474 or by email