investor.com Prepares Americans to Ask Specific Questions of Advisors and Firms with New, Free Tool
Questions are customized based on firms' and advisors' regulatory backgrounds
ROYAL OAK, Mich., July 27, 2020 /PRNewswire/ -- When Blain Reinkensmeyer found out his grandparents spent more than $100,000 on excessive fees with a financial advisor they thought they could trust, he made it his mission to fight for transparency and trustworthiness in the industry.
"One of my goals, when creating investor.com, was to arm Americans with the right questions to ask any financial advisor or firm in the country," said Reinkensmeyer, founder of investor.com. "But I didn't want to give them generic questions; I wanted very specific, customized and personalized questions for every single SEC- or state-registered firm and licensed financial professional in the country. I want Americans to walk into a meeting with a current or potential advisor prepared and confident that they fully understand every aspect of that individual's background and business operations."
With that in mind, today, investor.com has announced the roll-out of its new Questions to Ask tool. Site visitors can access specific questions on every advisor and firm profile page on the site that were created and selected based on the advisor's or firm's background and SEC or FINRA-provided data.
"We've spent the last two years analyzing data from firm ADVs, advisor regulatory records and also the questions site visitors have asked us about advisors or firms," said Jessica Hoelscher, investor.com's director of data and research. "From there, we developed a database of questions that will help Americans when researching or checking a specific advisor or firm, along with the rationale, 'Why ask?' for every prompt."
"Consumers should know what to ask and why when talking to someone who may eventually be responsible for managing their wealth," continued Hoelscher. "We've now, effectively, given people the tools to make the best decisions for themselves and for their futures."
Questions appear on every single advisor and firm profile page across investor.com when the site's Trust Algorithm flags certain data. For example, if the Algorithm finds that an advisor is dually registered, the following question and prompt appears on their profile page:
Why did you become a Dually Registered advisor instead of a standalone Investment Advisor? How will I know when you are acting in a fiduciary capacity versus as a salesperson?
Why ask? There are three types of financial advisors: Investment Advisors, Brokers and Dually Registered professionals (advisors who operate as both a broker and an investment advisor). Financial professionals who practice solely as an Investment Advisor are considered true fiduciaries, just like doctors or lawyers and have fewer conflicts of interest. 99.2% of all financial advisors barred from the industry have been either a broker or dually registered advisor. Learn more.
If an advisor's U4 indicates there is a history of criminal disclosures, the question is:
You've had X# of criminal disclosure(s) on your U4. What happened? When?
Note: the 'X#' automatically displays the number of criminal disclosures based on FINRA records.
For firms, since 12b-1 fees are a known systemic issue, consumers are encouraged to ask:
Do you offer mutual funds that have 12b-1 fees?
Why ask? 12b-1 fees increase the total annual cost of owning a mutual fund with no guarantee of higher returns. Some firms receive these fees as payments, which creates an incentive to promote them.
Other questions for firms are populated automatically based on their regulatory records. For example:
- Your firm or an advisory affiliate has at least one felony conviction. What happened? When? How many times did it occur? Will anyone that was involved be involved with my accounts in any capacity?
- What percentage of income do you receive from fees versus commissions?
- Is your firm also a Broker-Dealer or are they affiliated with one? What conflicts arise from this relationship? How do you mitigate them?
- How do you approach insurance sales? What conflicts do I need to be made aware of?
- Regulatory disclosures state that your firm sells proprietary investments and products. Please provide me a list of the products and a summary of how much you earn from them.
- Do you accept soft-dollar benefits? How did these benefits affect your firm's selection of a broker-dealer partner?
"We are forcing the industry to be more transparent because, let's face it: Regulation Best Interest (Reg BI), including the new Customer Relationship Summary Form (Form CRS) disclosure, only muddies the water further for consumers," said Reinkensmeyer. "Questions to Ask empowers millions of Americans to ask the RIGHT questions, and more importantly, understand WHY they are so important."
To view the various questions, visit investor.com and type in any advisor or firm name. There are currently more than 16,500 registered investment firms and 680,000 licensed financial professionals profiled on the site.
ABOUT INVESTOR.COM
The first unbiased website to enable Americans' single search access to any financial advisor or federally registered advisory firm in the country, investor.com was launched in 2018 to serve Americans as a trusted resource for researching and comparing financial advisors.
investor.com is wholly owned by Reink Media Group, a privately held company founded in 2009. For more information, visit investor.com/about.
Media Contact
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SOURCE investor.com
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