Financial Advisors in the News

Today's St. Louis Post-Dispatch headline has stirred up concerns touting President Obama's focus on reform of financial advisers.

The changes are aimed at broker-dealers (B-Ds) such as Edward Jones or Merrill Lynch, not registered investment advisers (RIAs) such as Compton Advisors, LLC and are focused on raising the standards with which B-D firms must treat their clients.

Under current SEC rules, advisers are held to a higher "fiduciary" standard while brokers are held to a lower "suitability" standard, meaning they must sell "suitable" products even if they are not the most cost-effective. - Reuters

By "fiduciary", the SEC means that RIAs are required to put their clients' best interests first. Broker-Dealers, in an arrangement with the SEC known as the "Merrill Lynch Rule" may put their own interests before those of their clients. As the SEC has dragged its feet against efforts to hold B-Ds to a higher standard, the Obama administration has turned to its Department of Labor to formally propose rules raising the level of consumer protection required of brokerages to that maintained by RIAs.

Compton Advisors, LLC has always maintained a fiduciary standard.

For more information, here is the Reuters article:

Obama takes aim at brokers' fees on U.S. retirement accounts