Why Registered Investment Advisors (RIAs)?
RIAs are legally bound to act as fiduciaries to their clients. That is, they have a legal obligation to put the clients’ interests ahead of their own. Brokers are not RIAs and do not have a fiduciary obligation to their clients. What to avoid: Avoid relying on investment advice from advisors such as stock brokers or insurance agents, who are compensated by selling products through commissions and fee sharing agreements with the issuers. In these situations, the advisor is likely to recommend investments based on the size of their potential compensation rather than the quality of the investment. And be especially careful when considering investments registered in “off-shore” locations. There is a high incidence of fraud among these operations. Even legitimate investment schemes in these regions typically lack investor safe-guards that exist in the US. Finally, understand the tax rules regarding investments outside the United States. About the Author David Kuenzi is the founder of Thun F
