Navigating Conflicts of Interest in the Financial Services Industry
About This Episode
As an investor, it’s important to be aware of the ways that conflicts of interest can show up with financial advisors and how these conflicts can impact your portfolio.
The drive to provide conflict-free advice is at the core of our firm and as we continue on our theme of the next generation financial advisor, today we’re talking all about conflicts of interest. We’re sharing the key aspects you need to be aware of to ensure that your advisor is selecting products that are truly the best fit for you.
On this episode, Marcelo and I talk about what conflicts of interest look like in the financial services world, what you need to be aware of when meeting with potential advisors, how the Canadian financial services industry is becoming more client-focused, what you need to know about the new Client Focused Reforms, and so much more!
Thank you for listening!
- Why investors need to think about conflicts of interest (1:21
- Defining a conflict of interest (2:56)
- How underwriting can lead to a conflict of interest for brokerage firms (4:21
- Conflicts that arise because of an advisor’s compensation and benefits (5:58)
- The influence of wholesaler sale incentives (7:02)
- What you should consider before investing in an institution’s in-house products (8:28)
- The conflict that caused several banks to be fined between 2012 and 2017 (9:39)
- Canadian investors’ awareness of potential conflicts of interest (10:43)
- The financial services industry’s transition to a client-focused environment (12:41)
- How the recent disclosure requirements benefit investors (13:55)
- Why fee and performance disclosure can be particularly confusing for investors (14:46)
- How the new Client Focused Reforms (CFRs) will help to alleviate conflicts of interest (16:41)
- How CFRs will force firms to clarify their fee structures and performance (18:16)
- The suitability standard versus the best interest standard (20:51)
- The benefits of the US RIA fiduciary standard (22:27)
- Our top recommendations for a conflict-free investing environment (24:02)
- Why awareness and curiosity will go a long way in guarding against conflicts of interest (26:47)
Thanks for Listening!
Today we discuss critical factors to think about to optimize your RRIF strategy and the significant impact that strategic planning can have on your estate value.
A good evaluation goes beyond a financial advisor’s performance and lets you get a sense of their processes, structure and the people helping you.
What’s the marker or gauge to value financial advice? How do investors value the benefits they receive when working with a financial advisor or advisory firm?