Will Consumers Get Shafted with the new Financial Reform Bill?

By: DFree | June 28, 2010 | The Politicians, The Regulators

Before last week’s financial reform bill passed, fee-only Registered Investment Advisors (RIAs) acted as acknowledged fiduciaries. RIAs provide full disclosure to investors about how they are compensated and should have no conflicts of interest when working with investors. In other words, they look out for the investor’s needs first and foremost.

Under the new financial reform bill that was recently passed, it will now allow brokers (stock brokers, sales reps) to sell investors commission-based products as well as proprietary products while acting as a fiduciary. Wait a minute! How can brokers peddling high commission products do this with an investor’s best interests at heart? Odds are that they won’t be able to and investors will once again get the short end of the stick.

This will make the task of sorting out highly qualified and ethical advisors from those who are only looking out for their own wallets, as anyone will be able to call themselves a fiduciary. More on this topic to follow as this unfolds.

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