Things this Advisor is Thankful for this Thanksgiving

Things this Advisor is Thankful for this Thanksgiving

I can hardly believe that I am writing this, but Thanksgiving is literally right around the corner. While I try to practice the art of being thankful, it seems this time of year we all try to focus on it just a little bit more. The whole topic of “what am I thankful for?” led me to start thinking about some of the things I am thankful for as a financial advisor and I thought I would share them with you.

I am thankful for having an investment strategy

I am so thankful for having an investment strategy that has significantly improved our ability to help our clients accumulate wealth. Our non-emotional, rules-based investment program allows us to have higher exposure to asset classes and sectors that are performing strongly under current market conditions. All the while, limiting exposure to those areas that are underperforming and will most likely continue to underperform. Supply and demand control the market, and we can observe what areas are overbought or oversold and build our investment models based upon this information. Finding ways to increase and preserve our client’s wealth is an essential part of our job as financial advisors.

I am thankful that more people are becoming educated

I am also thankful that more people are becoming educated about how to best advocate for themselves when they are looking for a financial advisor. They are starting to search for terms like “fiduciary” and understand how important it is to have a financial advisor legally obligated to put your best interest first. While fiduciaries are less predominant in the industry and can take a little extra research to find, the benefits of having non-conflicted advice is truly priceless. People are also finally realizing that costs really do matter inside their investments and over time, excessive fees can be extremely detrimental to their overall account balance. They want technology available to help them make impactful decisions that will ultimately help them achieve success. The only way our industry can continue to evolve and become better for our consumers is if the consumers continue to demand better for themselves.

I am thankful for our clients

Finally, what I am most thankful for is our clients and the experiences and relationships they have brought to me. We understand the trust that is necessary to choose to work with an investment advisor and we do not take that lightly. I am thankful for a career that allows me to build relationships that help our clients feel confident that their finances are being taken well care of. I am grateful for the opportunity to use the skills I learned in my 10 years as a pediatric emergency room nurse and use them to help educate and empower our clients so they can make great financial decisions. Every day is an opportunity to learn something new and to make a difference in our client’s lives. That is a lot to be thankful for! So, from the team at Victory Fiduciary Consulting we would like to wish you and your family a very Happy Thanksgiving!


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Finding the Right Investment Plan Doesn't Have to be Scary.

Finding the Right Investment Plan Doesn’t Have to be Scary.

Finding the right investment plan doesn’t have to be scary. Halloween is here and if you are a kid (or kid at heart) you can’t wait to get dressed in your favorite costume. You may even get “spooked” by a ghost if you are lucky. However, finding the right investment plan does not have to be scary. Here are a few ways to make sure your investment account is filled with treats not tricks.

Don’t get tricked by spooky share classes within your portfolio. Did you know advisors can use different share classes for the mutual funds inside investment accounts? Some share classes pay additional revenue to advisors known as “12 b-1 fees”. Revenue sharing is when mutual fund companies pay your financial advisor an extra incentive or commission for recommending their mutual funds instead of other funds.  Other share classes may charge a high up front cost in order to invest, or may cost you additional money if you withdraw from the fund at a later time. Institutional share classes are typically the lowest cost fund. They charge only the cost of the underlying fund’s management without any additional fees or expense. As a rule of thumb, try to use institutional or non-commissioned “no load” funds and stay away from other more expensive share classes that can be a drag on your account’s overall performance. Remember costs do matter when it comes to your investments, so ask your advisor what share classes they will recommend for your portfolio. You can hire an independent fiduciary to conduct a full analysis of your current holdings and help you determine if you are receiving great value. Don’t let excessive investment fees haunt your portfolio.

Don’t get booed by your financial advisor. A well thought out investment strategy can help you increase your chances of achieving your financial goals. One significant piece to this is finding a qualified financial advisor to help you. If you can find an advisor who is a fiduciary, they are legally required to give you advice that is in your best interest only. Many advisors fall under what is called a “suitability” requirement. This means any investment product they are recommending to you doesn’t have to be a better investment, it just has to be “suitable” for your age, risk tolerance, etc. Very few advisors fall under a fiduciary requirement meaning the advice you are paying for, by law, has to be in your best interest and require full disclosure of any possible conflicts of interest. CEFEX certified advisory firms take it further by demonstrating adherence to the Global Fiduciary Standard of Excellence. When client interests are placed first and conflicts of interests are removed, client outcomes can be significantly improved. No tricks here!

Making sure your investments are collaboratively working together is not a bunch of hocus pocus. If you spend a lot of time talking to your advisor about your individual investment accounts, but never discuss how to invest your 401k at work, you are missing out on a key piece to your eventual retirement plan. You probably have short term, intermediate, and long term financial goals for your investments. Make sure your overall financial plan incorporates these. One way to do this is to choose an advisor who offers sophisticated software projections as part of your planning. You can see how different scenarios could impact your future and allow those outcomes to guide your decisions today. Some advisors even offer client portals that allow you to track your individual accounts, create budgets, and take control of important financial decisions from the comfort of your home laptop. No secret spells necessary, we simply believe the more power we can give our clients, the better outcomes they achieve.

Need help Finding the right investment plan?

We know making decisions for your financial future can be downright scary, but it really does not have to be! With the right education, knowledge, and perspective we believe any investor has the power to make great financial decisions. We would love to talk with your today about your current situation to see if there is anything we can do to help you keep “tricks” out of your investments.

Happy Halloween!!


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

How to Be a Responsible Investor During Times of Uncertainty

How to Be a Responsible Investor During Times of Uncertainty

Let’s look at how to be a responsible investor during times of uncertainty. There is no doubt that many Americans are feeling weary of the future of the stock market. After a sweet ride down easy street for the past ten years, many investors opened up statements in January and saw their accounts had negative performance. “I lost money.” It is hard to open up that 401k statement and not feel a sense of fear and regret when the ending number is less than the opening number. Thankfully, the markets have rebounded and most of those negative returns have climbed back to positive numbers. However, it is still raw in investor’s minds and many are wondering “what next?”

As a financial advisor, this opens up a wonderful opportunity to educate investors who up until this year didn’t really care too much about how they were invested. All they knew was that they were making money and everything was “fine”. The problem is that “fine” can turn into “definitely not fine” if no one is watching your accounts and making sure you are invested appropriately. I would like to offer a few suggestions for investors to consider, regardless of market conditions.

Make sure you know how your account is currently invested and why those specific funds/ETF’s are a part of your portfolio. Does your advisor use a tactical approach while constructing your investment line up? Instead of just buying across all asset classes and holding them for the long term (you may know this as diversification) we use a strategy that allows us to strategically invest only in areas of the market that have strong positive momentum and performance. This strategy steers us to areas that are doing well and should continue to do well, and steers us away from areas that are showing poor momentum. As an example, our current tactical models have no exposure to emerging markets or international stocks. Why? Because it’s performance has been weak at best and a drag on overall performance. When it’s momentum shifts to favorable again, we will consider adding it back to our models.

Understand the costs that are charged within your account. I have found so many investors have virtually no idea how much their accounts are actually costing them. They are often surprised after we pull back all the layers and show them how much money has gone to expenses. No investment account is free and certainly you will need to be willing to pay for professional counsel and management. But, if left unchecked, excessive fees can wreak havoc on a portfolio’s overall performance over the long run. Make sure you know what fees you pay and then you can determine the reasonableness of them.

Finally, and probably most importantly, to be a responsible investor you should know who your advisor is working for. Many investors believe that when they hire an advisor, the advisor HAS to work for their clients first and foremost. Spoiler alert, if they are not a fiduciary then they probably work for someone else. Stock brokers and insurance agents work for their employers first. Their recommendations have to be suitable, but not necessarily the best option for you. Many people are surprised to hear this. I often say that placing our client’s best interests above our own sounds like common sense, but it’s not necessarily common practice. Fiduciaries on the other hand, have a legal obligation to put their client’s needs above their own. Would you feel more comfortable working with a team who is legally obligated to act in your best interests first?

We understand that investing in the stock market can be confusing and at times even a little scary. This could be a great time to sit down with a fiduciary who can help you take a deeper look at your current investments and make sure you understand your options when it comes to investing. We would welcome the opportunity to help you become a more responsible investor; especially during times of uncertainty in the market.


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Investment Accounts Go from Hot to Cold

When Your Investment Accounts Go from Hot to Cold

What do you do when your investment accounts go from hot to cold? With the end of August here, summer is winding down. As if we needed the reminder, it seems the weather felt the need to rub it in. The temperature outside has dropped, going from hot to cold with little warning. It always amazes me how fast the weather can change.

Much like seasonal swings in weather, the stock market can surprise investors with sudden changes. It has been a wild ride on Wall Street this past month. Investors saw the worst trading day of the year and the media added to the frenzy with headlines screaming things like “inverted yield curve” and “looming recession”. Market volatility (like what we have seen this month) can cause investors to make knee jerk decisions out of fear rather than education and understanding. So, how should investors react when their investment accounts are going cold?

Your first response should be: nothing. Surprised? Making a big investment change in your portfolio based solely on short term market conditions is likely going to be more harmful than helpful. I often tell our clients “if your goals and situation have not changed since last month, most likely your portfolio should also not require changes”. While no one has a crystal ball, most investor commentators agree that the most recent volatility we have experienced is tied to the US-China trade dispute. While it seems that any chances of closing the trade deal this year have diminished, most experts do believe that the markets have priced themselves to include the stalemate we are in with China. To sell positions now would lock in any losses and would risk missing the next recovery and upswing.

What can you do? I find many investors question their current strategy when markets decline. One thing investors CAN do is make sure they understand what investment accounts strategy is currently being used to manage their investments. Are changes being made reactively, after markets have experienced a change? Is there a specific buy and sell discipline that is used to determine what areas of the market you are exposed to? What system does your current advisor use to determine how you are invested, and when changes need to be made? For example, we use a sophisticated, math based approach that allows us to invest in areas of the market that are performing well and that steers us away from areas that are performing poorly. The investment methodology that we use acts like an early warning system, picking up on changes in the stock market supply and demand system. We have a clear buy and sell discipline which helps us stay invested in winners longer and alerts us when we should sell an underperforming area. You should understand how your account is invested and the methodology that is being used.

If you are unsure what current strategies are being used in your account or if you are just interested in having a second opinion I would love to review your current portfolio with you. Our initial meetings are always complementary and educational. We know how nerve wracking it can be to see your investment accounts go from hot to cold without warning. At Victory, we strive to give you the education, perspective, and insight needed to make great decisions; regardless of the current market temperature.


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Make Sure Your Investments Don’t Go On Vacation

Make Sure Your Investments Don’t Go On Vacation

This summer, make sure your investments don’t go on vacation. Your accounts should continue to work hard on your behalf, even when you are busy enjoying the Jersey Shore with your family. The key is to find an advisory firm that will use an investment strategy that never takes a vacation.

While you are busy eating boardwalk pizza and boogie boarding waves, what is your advisory firm doing to maximize your investment returns? Do they have a defined “buy and sell” discipline? Meaning, what prompts them to add or delete an investment in your portfolio? Do they add an investment after it’s on the front cover of financial magazines or sell after it experiences below average returns? This would be similar to buying high and selling low.

Similarly, what process is your firm using to determine what asset classes and sectors you have exposure to in your portfolio? Are you invested across many asset classes and sectors without a process to determine what areas are “heating up and cooling down”? What if your accounts could be invested in the areas that are gaining strong momentum and conversely, be steered away from the areas that are slowing down or are going backwards.

In the past, the most accepted method of investing was to spread your money out amongst many asset classes or mass diversification. Some would do well, some would not. Each year you would rebalance your account, taking money from the areas that did well and transfer it to the areas that did not. The hope would be that eventually, the underperformers would eventually become the outperformers. This is called the Modern Portfolio Theory, though the data stems from the 1950’s. Not so modern is it? The issue however is, what happens when a sector or asset class underperforms for long periods? How long should you keep taking money from your winners and give it to the losers. This process would be referred to as a “buy and hold” strategy. We refer to this as Deworsification. If you don’t know what your current portfolio strategy is, you should ask. Your long performance will be tied directly to this.

We believe there is a better way. We use a math-based, non-emotional process to help us determine what areas are outperforming with positive momentum and what areas are underperforming with negative momentum. We continually monitor these changes and reallocate as necessary. We construct our models using this data. As a result, our tactical model’s five year performance numbers as of May 2019 was 17.56% net of all fees and expenses. It must be noted that past performance does not guarantee future returns. As a comparison, the S &P 500 returned 10.5% during the same period.

Investors should ask themselves if they fully understand what their current investment methodology is. If they are unsure, further investigation is needed. Your account’s long term performance will be directly affected by what you are invested in and how it’s monitored.

This summer, while you soak up some rays relaxing on the beach, you can make sure your investment accounts don’t take a vacation. If you are interested in a complementary review of your current portfolio, call our office today. We would love to make sure your investments work hard so you can take longer vacations!


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Celebrate Financial Freedom on July 4th

Celebrate Financial Freedom on July 4th

Will you be celebrating your financial freedom next week? It’s hard to believe that Fourth of July is right around the corner. In just a few days, all across America families will get together and celebrate with barbeques, pool parties, and fireworks. We remember the day we became an independent nation and reflect on how fortunate we are to live in freedom.

As a financial advisor, we seek to help provide our clients a different type of freedom: financial freedom. For us, financial freedom means your money is able to provide the lifestyle you desire for the length of time you need it to. In other words, making sure you enjoy life while never outliving your money. Sounds like a simple concept but it requires careful planning and commitment working with an advisor who understands your goals and shares your vision.

Consider hiring a fiduciary advisor to help you achieve your financial independence. A fiduciary is bound legally to put their client’s need ahead of their own. In contrast, traditional advisors must only make “suitable recommendations”. Just like sunscreen offers you an additional layer of protections from sunburn, hiring an advisor who is held to the fiduciary code of ethics can offer additional protection to your assets because legally they must work for their clients first.

You should understand what your advisor’s investment process is. How do they determine what asset classes you should have exposure to? How do they decide which fund/ETF should be purchased? Do they typically buy and hold or use a “tactical” approach? What is their Buy and Sell Discipline? Do they rebalance, meaning do they take money from the winners and give it to the losers? What happens if the losers continue to lose? We find that most Advisors performance cannot beat their index. Furthermore, the average fund or ETF generally does not outperform their index over time.

Ask your advisor if they utilize a client investment policy statement. An investment policy statement is a crucial document that formalizes an advisor’s process regarding investment lineup selection, monitoring, and replacement. Did you know that growth stocks significantly outperformed value stocks over the past year? Having exposure to international stocks last year would have had a negative impact on your portfolio.

We employ a math-based investment strategy that allows us to focus on asset classes and sectors that are over performing and steers us away from those that are underperforming. This strategy allows us the opportunity to take what the markets will give us which allows us to grow and potentially preserve our client’s accounts over time. Our tactical model was up 5% in 2018 and has averaged over 17% over the past 5 years. Past performance is certainly no guarantee of future performance and this particular model may not be suitable for all investors, but at the end of the day, performance determines how your account will grow.

Achieving financial freedom will require careful planning. Did you know retirement planning should begin as early as possible? The earlier you begin to plan, the better chances you will have at achieving your goals and making sure your money works for you and not against you. The decisions you make in your 20s and 30s will significantly impact your lifestyle in your 70s and 80s. Hire an advisor who can guide you through all phases of the planning process. We use sophisticated web based planning software that allows us to show you how seemingly small changes can make a big difference in achieving your specific goals.

As you prepare to celebrate our country’s independence, take a moment to determine if you are actively preparing to achieve personal financial freedom. If you are unsure, we would love to sit down with you to map out a plan. Happy Fourth of July from our office at Victory Fiduciary Consulting.


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Are Your Investments are Sinking or Swimming

Are Your Investments Sinking or Swimming?

How often do you make assumptions when you open your 401k statement about how well it is performing? I often find that clients will decide whether or not their account is performing well based upon whether their account is worth more or less at the end of a given quarter. This is not necessarily a good way to determine whether or not your account actually had “good” performance.

My 12-year old daughter is relatively new to the sport of competitive swimming. She started later than most other swimmers her age and has worked hard to try to close the gap. During her meets (her very long early meets) I have spent a lot of time analyzing data of her times. Most important to her is that she continues to drop time, improve her form, and have fun. But many times, she will ask me, “how are my times”. She wants to know how her times compare to other kids in her age group. Just knowing how fast she swam is meaningless if she does not know how fast all the other competitors were.

The same is true of investment performance. If your performance report says you had a net return of 6% for last quarter, some might say that it performed “well.” What if the rest of the fund’s peer group returned 11% that quarter? Then you might think 6% wasn’t actually that great. Or what if you see a return of -1%? Your first thought might be that my account is underperforming but if the peer group returned -2.3 % then your return actually faired better than its peers. Another question to ask is what percentage return has your account earned AFTER fees and expenses? Most people honestly have no idea, yet this is really the most important number when it comes to knowing how your account performed. Expenses matter, especially in the long run. It is important to know the whole picture in order to determine if your portfolio is actually working for you and not against you.

You should consider working with an advisor who screens your fund lineup every quarter to determine if your current holdings are appropriate. Screening should involve more than just short-term performance. A fund’s five-year and ten-year performance numbers are a better indicator of how it has performed rather than just looking at the last three months. Other factors that should be considered is how the fund compared with its closest index and peer group in expenses, risk taken, and style drift. Monitoring software that provides a fund fiduciary score can give a good overall snapshot of how a fund compares using all criteria, not simply performance. Our firm seeks to find investments with consistent long-term performance at extremely low costs. A great question to ask your adviser: “What screening criteria do you use in determining if my fund investments are still appropriate and the best to achieve my goals?” Just because a fund was appropriate three years ago and was the best choice then, doesn’t mean it is still the best option today. You must have an effective ongoing process to help you achieve your desired outcome.

Just like my daughter’s swim times must be viewed in light of all the other swimmers she competes against, you should also compare your investment accounts in a similar way. If you are not sure how well your current accounts are actually performing, we would be happy to sit down with you and give you a complimentary report detailing how your portfolio stacks up against its peer group. If someone asked if your portfolio was sinking or swimming, would you know how to answer? If you aren’t sure, it might be time to start asking questions


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

 

 

What to Watch For With 401k ‘Autos’

What to Watch For With 401k ‘Autos’

Automatic enrollment/escalation has been great for participation rates, but there are potential pitfalls

They’re unquestionably effective, but can at times be “logistical nightmares” for HR reps, according to Ashley Rosser, president of Victory Fiduciary Consulting. How do advisors ensure they work?

Watch the interview below to learn more

Five Training Tips to get Financially Fit

Five Training Tips to Get Financially Fit

Ashley Rosser, Mullica Hill’s expert Financial Advisor offers Five Training Tips to get Financially Fit! 

I love fitness. I love running and have raced multiple half marathons. I have competed in many triathlons, including one half iron distance that took me over 7 hours to complete and I am currently in training to complete my second one. I absolutely love setting crazy goals, following a well laid plan, and then achieving what I once thought was impossible.

Many comparisons can be made for how individuals can achieve “financial fitness”. America, as a whole is completely out of shape financially. Consider that 78% of Americans are considered to live paycheck to paycheck.Three quarters of workers would say they are in considerable debt. Most frightening, only 12% of Americans aged 55-64 have saved enough for retirement.

Five Training Tips to get Financially Fit!

1. Set goals.

You can’t know how to get somewhere if you don’t even know where you want to go. It is ok to have different short term and long term goals. Maybe your immediate goals are to get a savings account built up, or to reduce your current high interest debt. But maybe long-term you want to make sure your retirement accounts are funded appropriately or you could want to save for a second home. Whatever your goals are, write them down and be specific.

2. Start budgeting.

No one ever wants to actually do a budget, but it is impossible to make the best use of your money if you don’t even know what you are spending each month. Be honest and realistic. If you are spending $500 a month on groceries, then don’t budget for $200. Look at your spending trends and see if any adjustments can be made. No matter how tight your budget is, there is probably at least 2% of your income that is spent that you cannot account for. Think about how that 2% could be better used.

3. Save by paying yourself first.

I just mentioned that you probably can’t account for at least two percent of your income that is spent. Make sure you are paying yourself first, just like a bill each month. $25 dollars a week means you can have $1200 saved in an emergency account in just one year. Start somewhere, and try to increase what you save each month. Chances are if you don’t see it, you won’t even miss it. While we are on the topic, make sure you are deferring into your 401k account. The sooner you start, the more advantageous it will be for you in the future. If there is a company match, make sure you max out your deferral percentage right away to get the full match. If you don’t, you are literally leaving free money on the table.

4. Reduce that debt!

Take inventory of what your debt and interest rates currently are. Try to pay off your highest interest rate balances first. Consider consolidation or transferring to a low interest rate if possible. If you do a balance transfer, make eliminating the debt a high priority. Most importantly, limit your future use of credit. It is incredibly freeing to climb out of the debt but easy to get sucked back down if you are not extremely careful with how you spend.

5. Hire a “coach”.

I hired a coach for my first half ironman because I was overwhelmed and was not sure how to achieve success. A financial advisor can help you get on the right path for financial fitness. Before you hire an advisor, ask them how they will be paid. Are they paid on commissions or a predetermined asset based fee? Do they act as a fiduciary in your best interests? Make sure you understand what value you will receive for the fees you will pay. Consider using low cost, well diversified investment strategies for long term investments.

If you are interested in getting more information on how to achieve financial fitness, feel free to make an appointment at our office. I would the truly love the opportunity to help you get into the best financial shape of your life.


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Is Your Advisor Concerned About Conflicts of Interest

Is Your Advisor Concerned About Conflicts of Interest?

When I worked as a nurse at a large hospital, we never got “free lunch”. Pharmaceutical companies never brought us bagels in the morning, no sandwiches and brownies for lunch, no late afternoon coffee and cookie sessions. Why were we denied such innocent “perks of the job”? My institution held their patient’s interest higher than their own and they were concerned for any direct or indirect conflicts of interest. The hospital never wanted a practitioner to be swayed in one direction based upon a personal relationship or incentive.

There are also conflicts of interest that can exist in investment management relationships. Do you want your investment advisor to give you unbiased recommendations that are in your best interests first? Of course you do, a fiduciary has the legal obligation to do so. The definition of a fiduciary means an adviser who works directly for their clients and must document placing clients’ interests ahead of their own.

If an advisor is not acting as a fiduciary, they do not have to give advice that is in your “best interests”. Rather, they follow the Suitability Standard, which requires only that broker-dealers must reasonably believe that any recommendations made are “suitable” for clients. A key distinction in terms of loyalty is important; in that brokers serve the broker-dealers they work for first.

Why non-fiduciary advisors have  conflicts of interest

Non- fiduciary advisors can receive many different forms of compensation. Some recommendations may earn them lavish trips, bonuses, expense reimbursements among many other incentives. They may have a “quota to sell” of a particular product. If it is “suitable” for you, it may be recommended even if it’s not necessarily “the best”. If they recommend moving from one fund to another, this can trigger a commission to be charged. Sometimes, the only way an adviser receives compensation is by recommending to buy or sell funds, in other words to “move money”.
So, if your advisor works for a bank or broker dealer, the types of investment options and services will depend on what the bank or brokerage firm will allow. Nearly all Broker Dealers have production requirements for the Advisory Firm that must be met. The Advisory Firm must sell a certain amount of securities to keep their job with the Broker Dealer.

Why RIAs Do Not have  conflicts of interest

An independent Registered Investment Advisor (RIA) is legally required to work for their clients first. They offer the investments and services that are in their clients’ best interests without constraints.

RIAs receive their compensation from their clients only based on a mutually agreed upon fee. Sometimes it may be an hourly rate for services. More commonly, fiduciary advisers will charge a flat quarterly fee based upon the investment account size. It does not matter what investment are recommended, the advisor’s fee remains level. They can’t accept any incentives from Mutual Funds or other investment companies/products. Their only source of income comes from the client and remains non-conflicted this way.

I agree with my former employer’s stance on conflicts of interest. No one wants to worry that a medical decision could be made without the patient’s best interest placed first. I also believe that when it comes to your investments, the standard should remain the same. My clients’ interests should always be placed ahead of my own. I would love the opportunity to talk more if you have questions about whether a fiduciary adviser could help you make decisions for your financial future.


Ashley Rosser, President

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.