A survey conducted this past August confirms that consumers are confused by the different standards that apply to various types of financial advisors.
76 percent of the 1,319 survey respondents mistakenly believe that brokers are required to act as fiduciaries and serve the best interests of their clients.
The reality is that brokers or registered reps must adhere to suitability standards, but not fiduciary standards.
Registered investment advisors (RIA) do maintain fiduciary relationships with their clients. 77 percent of survey respondents were aware of the fact that RIAs are fiduciaries.
While the results indicate high levels of investor confusion, there was clear consensus among consumers with respect to the desire for a uniform fiduciary standard. 97 percent of those surveyed support a fiduciary requirement, and 90 percent believe that brokers and RIAs should adhere to the same standard.
A Bloomberg article discussing the survey results also indicated that insurance agents have provided the strongest industry opposition to the notion of a universal fiduciary standard requirement.
Source: Bloomberg
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