The Difference Between a Fiduciary Adviser and a Broker/Agent/Salesperson

Shark SuitFrom experience, I know that most people do not understand the differences between a fiduciary adviser and a broker/insurance agent/salesperson.The average person would say they ALL sell financial products and charge commissions.The reality is actually far different. In my opinion, it is crucial for the general public to understand the differences and what it means to your financial future.

Fortunately, one of my business partners, Scott Simon has written a recent column on the subject where he nails it. Scott has been writing for Morningstar for more than ten years on fiduciary matters, but this column really hit home for me. He does a great job of dissecting the differences between the various adviser types and why it matters.

Scott’s column focuses on a retirement plan sponsor and her obvious confusion about the various types of advisers. Scott writes a sharp and brilliant letter to the plan sponsor in his column outlining in detail why it is important for everyone to know the difference and how it impacts their employees.

If I could, I would make this letter by Scott mandatory reading for every employer/plan sponsor in the United States. It provides a clear understanding of why they should care. Please feel free to share this post with anyone you know.

Here is a link to Scott’s most recent column for Morningstar.

Enjoy the week!