Published: Thursday, May 16, 2013 at 05:02 PM.

 Question:  So some investment advisors are not fiduciaries?

 Arbor Wealth:  That’s correct.  Wirehouse advisors, like stockbrokers, are not fiduciaries.  Language in their investment advisory agreements may state that they may make recommendations that benefit their firm but not necessarily the client. 

 Question:  What would be an example of that?

 Arbor Wealth:  If an advisor is paid a commission for placing any part of your assets in a certain fund, then he is being paid by a source other than the client.  For instance, if an advisor places your assets in a parent company mutual fund, say a mutual fund run by the company for which he works, he may be paid a higher commission by the parent company.  So the client may be unsure if the advisor is placing the money in this fund for the advisor’s benefit or for the benefit of the client. 

 Question:  So as a fiduciary, you receive income only from your clients?

 Arbor Wealth:  That is exactly correct.  We are compensated solely by our clients.  So obviously, our loyalty is to them and them only and we are completely committed to acting in their best interests.  Contrast this arrangement with, say, the sale of an annuity.  A commission is paid to the annuity salesperson and again, the client may not know, after having been sold one, if the sale of the annuity was in his best interests or the best interests of the salesperson.

 Question:  So you don’t receive commissions and you don’t sell products.  What do you invest your clients in?

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