Family Investment Center Releases Whitepaper Addressing Changing Roles of Investors and Advisors in Light of Fiduciary Rules

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Terms like “conflicted advice” and “fiduciary rules” are quickly escalating among media headlines as thousands of investors ask questions about the fees or commissions their advisors earn on their business. As a response to these headlines and pending Department of Labor changes toward fiduciary rules, Family Investment Center recently released a new whitepaper addressing the changing roles of investors and investment advisors.

We were ahead of the curve when we established ourselves as a fee-only investment advisory company."

Family Investment Center Releases Whitepaper Addressing Changing Roles of Investors and Advisors in Light of Fiduciary Rules: White House Report Says Conflicted Investment Advice Could Cost Americans Millions in Lost Revenues

Terms like “conflicted advice” and “fiduciary rules” are quickly escalating among media headlines as thousands of investors ask questions about the fees or commissions their advisors earn on their business. As a response to these headlines and pending Department of Labor changes toward fiduciary rules, Family Investment Center recently released a new whitepaper addressing the changing roles of investors and investment advisors. The whitepaper includes highlights from a White House report warning investors that conflicted advice could cost them millions of dollars – and explains what investors should look for in an advisor in light of pending fiduciary rule changes to avoid conflicted advice. Copies of the whitepaper were sent to the president, federal legislators, SEC commissioners and others.

“As a fiduciary,” said Dan Danford, founder/CEO of Family Investment Center, “we want to put all the information out that we can to safeguard investors and their retirement savings. This new whitepaper touches on some of the most important topics occurring in the industry today.”

The White House issued a report last year that trumpeted these issues, specifically drawing attention to potential lost revenues from investment professionals who earn a commission on products they sell to investors. The report said clients are at risk because fee-based advisors don’t offer an objective viewpoint on investments they sell – because these are sales through which they make profits. Alarmingly, such advice is estimated to cost investors up to a 12 percent loss in potential growth in IRAs over a 30-year period.

In contrast, fee-only advisors can be registered financial planners, but they won’t accept commission from sales – instead they are paid a flat fee or percentage of assets under management for their services. Many investors say they prefer this type of advisor because they are typically committed to helping clients understand the issues involved with their portfolios and can identify what investors are actually paying for in their retirement plans.

“We were ahead of the curve when we established ourselves as a fee-only investment advisory company,” Danford said. “We knew we were right almost 20 years ago, and these recent developments only bolster our position as a fiduciary acting in the best interest of our clients.”

The whitepaper also includes a section on the rise of the robo-advisor, which is an automated investment service that has an allure to DIY investors. Unfortunately, many of these automated services may be flawed. Rather than rely on an automated service, investors are urged to get their advice from an experienced advisor who can truly answer their questions and openly discuss options. As noted in the Family Investment Center document, a trusted advisor will see the big picture and offer client-centric approaches. Most importantly, investors are encouraged to consider seeking a fee-only advisor who won’t push products based upon commission earnings.

Additionally, Family Investment Center recommends that investors look for licensed and credentialed advisors, such as a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Chartered Financial Consultant (CFC), or a Personal Financial Specialist (PFS).

“Ultimately, one of the most important things to look for is a fiduciary because this is a person who will act in the best interest of the investor,” says Danford. “Most fiduciaries have already been operating on a business philosophy of client needs first. Now they can emerge as true industry leaders with recent federal and national attention toward conflicted investment advice.”

About Dan Danford and Family Investment Center
Dan Danford serves as Founder/CEO of Family Investment Center, a full-service, commission-free investment advisory firm. Based in St. Joseph, MO, Family Investment Center also serves clients in the Kansas City Northland area and across the country.

Danford holds an MBA, is a member of the National Association of Personal Financial Advisors (NAPFA), is a CERTIFIED FINANCIAL PLANNER™ (CFP®), and is a Certified Retirement Services Professional®. In 2014, Danford was featured in an article exploring solutions to math anxiety in the Voices section of the Wall Street Journal. A 2009 Wall Street Journal article outlined Danford’s unique birthday messages to clients, complete with a $2 bill inside the envelope. Also in 2009, Danford was quoted on “ABC News” for his insight into how parents can protect funds for their children’s college education. A 2006 article in The New York Times quoted Danford’s insights on working with a financial advisor. Danford has written and published two books, Million Dollar Management: Simple Lessons to Use Wealth Management Principles for Your Family Investments (2002) and May I Help You? Why You Need a Fee-Only Investment Advisor (2004).

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Contact:
Dan Danford
Founder/CEO
Family Investment Center
816-233-4100

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Family Investment Center
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