The Right to Full Disclosure

By Ginger Weber | November 04, 2016

The concept of full disclosure, as it relates to your relationship with your financial advisor, is probably not a hot topic at your dinner table. We think it should be.

The Issue

Ginger Weber is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt County

Whereas investors may expect that their own interests should be placed at the forefront of the advisor-client relationship; and that they be given all meaningful information relevant to their financial decision making process - most investment providers are under NO LEGAL OBLIGATION to meet these basic demands.

Investors are often confused about the topic of disclosure and the implications on their financial well being. We want to shed some light on the subject as we help you identify the type of relationship you may have with your investment advisor.

Full Disclosure - The Problem

Full Disclosure refers to an investment professional providing his or her clients with any and all meaningful information relevant to their financial decision making process. An advisor who is legally bound to these rules must fully disclose to clients, in writing, their:

  • Specific services and fees
  • Compensation structure
  • The types of clients they serve
  • Their educational background
  • Details regarding any industry related disciplinary action
  • Their business activities and affiliations
  • And any conflicts of interest that might affect the objectivity of the advice they deliver.

Investors deserve this level of disclosure, but few get it. The unfortunate reality is that the vast majority of financial professionals only operate under partial disclosure rules (sometimes described as "Suitability Requirements").

The partial disclosure rules can contribute directly to the disconnect between what clients wants, needs and expects - and what they are actually provided. For instance, representatives of brokerage firms, banks and insurance companies (who may also be called financial advisors) fall under the umbrella of partial disclosure.

However, Certified Financial Planners™ and Registered Investment Advisors (such as Premier Financial Group) are legally bound to full disclosure requirements.

Why This Matters to You

Ginger Weber is a CFP, Certified Financial Planner and a 401(k) Financial Advisor with Premier Financial Group in Eureka Humboldt CountyWe believe that working with an advisor bound to full disclosure rules is a huge benefit to clients.

Full Disclosure lays the foundation for the trusted advisor relationship most investors want. Knowing that your financial professional is legally obligated to inform you of all material factors that might influence your decisions can create a level of trust upon which a meaningful, long-term financial relationship can be built.

A relationship based on full disclosure can help minimize the conflicts of interest that have plagued our industry (and perhaps your own investment experience) for years.

Recommended Actions

Knowing how important the concept of full disclosure is, we would recommend the following:

  • Take time to imagine what this type of ideal relationship could mean for your success as an investor and for your financial peace of mind.
  • Go ahead - ask your current financial advisor if he or she is held to Full Disclosure rules. If they say yes - then ask them for a signed acknowledgement.  But you may be surprised by their reluctance. 
  • Accept our offer to talk.
Our Offer

We invite you to call us at 800.331.7212. Our financial advisors are available to discuss your investments and financial planning in as much detail as you like.  Premier Financial Group is strongly committed to all Full Disclosure guidelines and we would be happy to share with you why we feel these are so important.

Posted in Financial Planning, PFG Newsletters