You’re sitting in your broker’s office waiting for them to finish a meeting. The door opens, your broker walks out shaking hands with a very slickly-dressed person. You later find out they are a sales representative for a mediocre mutual fund family, who your broker refers to as a “wholesaler.” What you find out much later, the hard way, is that the wholesaler had just informed your broker about an all-expense-paid cruise to Fiji that they will win if they’re the top seller of the wholesaler’s mutual funds over the next two months. Guess which mutual fund your broker recommend you buy that day?
Is it legal? Yes. Is it right? No. How can this happen? Your broker has no fiduciary responsibility to you. That means your broker does not have to put your best interests first.
As a fee-only Registered Investment Advisor (RIA) firm under the 1940 Investment Advisers Act, we are held to the fiduciary trust standard, which legally requires us to act in your best interest.