Signs That It’s Time for a New Broker – New York Times – 02/02/13




The New York Times

Your Money – February 2, 2013

Signs That It’s Time for a New Broker

By Ron Lieber

Every so often, a story so perfectly illustrates what can go wrong when you trust someone with your money that it serves as a kind of user’s manual for any investor who comes along afterward.

And so it is with the tale of Philip David Horn, the Wells Fargo broker who recently pleaded guilty to trading in clients’ accounts, canceling the trades and helping himself to the profits.

Mr. Horn was not legally bound to act in his clients’ best interests in this case and was only required to provide “suitable” investments. Still, according to Raschelle Burton, a Wells Fargo spokeswoman, “the clients’ needs should always come first” regardless of the level of duty required.

Comments February 3, 2013

Investment firms that use marketing gimmicks, referring to ‘clients first’ or ‘clients needs should come first’, are hiding from true fiduciary duty.  Only Investment Adviser Representatives who work at privately owned Registered Investment Advisory firms are required by law to act in the best interests of clients and accept true fiduciary duty.

The largest Registered Investment Advisory firms are affiliated with the largest wealth management firms, which are publicly owned by their stockholders.  Like all publicly owned companies they must place their stockholders’ best interests before their clients’ best interests.  This presents a clear conflict of interest between clients and shareholders.

Privately owned Registered Investment Advisory firms are required by law to accept fiduciary duty, placing their clients’ interests before any other party – including owners of Registered Investment Advisory firms.  Without conflicts, clients are provided true fiduciary duty.

Investors interested in protecting themselves should simply require their prospective or existing wealth and investment management firm to place the following statement in writing on company letterhead:

“We accept fiduciary duty and will place our clients’ interests before our company and our shareholders’ or owners’ interests.”

Aaron Skloff, AIF, CFA, MBA
CEO – Skloff Financial Group

Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA), Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies.  He can be contacted at or 908-464-3060.

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