Your clients, as investors, put a lot on the line – building wealth and safeguarding their ability to retire – and if they have an advisor to help, they typically place an incredible amount of trust in them.
As a CPA myself, I recognize that most investors place their greatest trust in their CPAs and look to them to provide counsel on who can provide them with financial advice free of conflict. With that responsibility, you want to make sure you are fully considering financial advisors who will serve your clients in an unbiased way, helping to protect and grow their wealth as a member of their professional consulting team.
Most people are under the impression that advisors have a legal responsibility to act in their client’s best interest – and it makes sense they would think that. The advisors (e.g., brokers, registered representatives, insurance agents) are licensed individuals who are smart and, presumably, well-trained. The truth, however, is that many advisors are not legally required to act in their client’s best interest. As unbelievable as that sounds, their advice can, legally, involve self-serving motives that drive conflicts of interest – at your client’s expense.
As I’m sure you’ve noticed recently in the headlines, the US Department of Labor has proposed a ruling that will require all investment advisors – independent advisors and broker-dealers – to adhere to a fiduciary standard of care for all retirement accounts. This, in turn, would eliminate commission-based retirement accounts and expand the scope of advisors who operate on a conflict-free basis.
About Kevin Leahy
Kevin Leahy, CPA, is founder and CEO of Connecticut Wealth Management LLC, a registered investment advisor with more than $500 million in assets under management, based in Farmington, Connecticut. He provides comprehensive personal financial and estate planning services, working with medical and dental professionals, business owners, corporate executives, and other individuals with substantial net worth and income.