Investing Involves Choices

When considering different ways to invest for your future, there are 3 are 3 choices to consider:

1. Invest on your own, online

2. Invest with a Broker/Dealer

3. Invest with a Registered Investment Advisor

To guide you to the right choice for you, you must ask:

1. How comfortable are you handling investing on your own?

2. If you’ve chosen to not invest on your own, how do you feel your advisor should be compensated?

3. How important is transparency to you?

4. How do you know your Advisor is acting in your best interest?

INVESTING ON YOUR OWN

Investing on you own could be the most ideal choice for some. After all, the cost is the lowest and who can care more about your personal finances than you. But if you are considering investing without the guidance of a professional you must ask yourself:

"Do I have the time, the interest, and the knowledge to invest on my own?"

Time-Are you capable of dedicating the time needed to track your investments and to stay current on the events that affect your investments?

Interest-Do you have a genuine excitement or thrill following economic events and business news?

Knowledge-How is your understanding of stocks, bonds, mutual funds, annuities, ETFs, options and other available securities? And, do you have a comfortable understanding of economics?

If you are lacking in any one of these areas, it is recommended that you work with the help of a trusted professional.

INVESTING WITH A PROFESSIONAL

If you've made the decision to invest with a financial professional, you then have 2 choices on the type of professional to invest with: a registered representative with a Broker/Dealer or a registered investment advisor (RIA). Here's some information to better understand the difference between the 2.

REGISTERED INVESTMENT ADVISOR VS. BROKER DEALER

There is a difference between a Registered Investment Advisor (RIA) and a Broker Dealer (BD).

YOU COME FIRST, NO MATTER WHAT.

An RIA’s “fiduciary” duty sets them apart from the rest. A fiduciary is someone that manages money for the benefit of another and is bound by law to place the interest of its beneficiary first and foremost. You would naturally think that anyone giving financial advice would be a fiduciary, but you’d be wrong. Brokers, registered representatives, and most people that call themselves financial advisors are not actually fiduciaries even though they are engaged in marketing themselves as financial advisors. In reality, only a small proportion of “financial advisors” are federally or state-Registered Investment Advisors and most financial advisors are actually considered “Broker-Dealers” by the Securities and Exchange Commission (SEC).

THE ADVICE YOU NEED.

A Registered Investment Advisor must follow the highest known standard in law, known as the “trust” standard, which means that an RIA is required by law to place the interests of its clients before its own and fulfill critical fiduciary duties in trust and confidence. In other words, the RIA must provide its “best advice”. On the contrary, a broker-dealer does not owe a fiduciary duty to its investment clients, but instead are required by federal law to act in the best interest of their employer instead. In comparison, RIA owes fiduciary duties to its investment clients only. This in turn means that superior service and stewardship can be found at an RIA, with no ulterior or underlying contradictory motives.

CONCLUSION

At the end of the day, you have to decide what works best for you. In some cases, going with the least expensive option can be the most ideal. In others, the least expensive option may be the most costly. At Lockey Wealth Management, in partnership with Fusion Capital Management, we believe in the structure of an SEC Registered Investment Advisor works because of the independence and service it allows us to offer. We want our clients to know that their interests come first.