’s Eric Schurenberg Has Advice on How to Get Investment Advice

TOM HUDSON: Building an investment portfolio is tough, even for the most seasoned
investor. That’s why so many people often turn to professionals for help.
Tonight’s commentator spotlights key differences when it comes to getting a
pro’s advice. He’s Eric Schurenberg of

ERIC SCHURENBERG, EDITOR, INC.COM: Most investors assume that the pros who advise them have to act in
investors’ best interest. In reality, that’s true of only some advisers,
known as fiduciaries. The others? They’re happy to let you think they
have to look out for you, but they don’t.

Now, the SEC is about to order all advisers to live under one uniform
fiduciary standard. Simple? No. You see, many advisers work on
commission. The conflict of interest is obvious. They have an incentive to
sell investments with high commissions. More money for them, less for you.
A fiduciary would have to recommend equally good investments with no
commission, of which there are many. So what about those commissioned
advisers? Do they have to change?

The SEC is likely to say no. Commissioned advisers just have to tell
you sometimes they act in their interest, not yours. Are brokers really
going to say that? No. OK, but then they could be forced to give written
disclosures. But you’ve seen those. When was the last time you actually
read one? We could be about to abandon a standard that requires
fiduciaries to be trustworthy and replace it with one that allows them be
whatever, as long as they tell you. Does that sound like progress? I’m
Eric Schurenberg.

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