Likely the most commonly asked question by prospective clients (and new clients) is “what makes you (CORDA) different?”  There are many answers to this question, but one of the most important and simple ones is how we are registered.  During initial conversation with prospective clients, they usually say something like; “I’ve had a financial advisor in the past and it didn’t work out so well….”  The real question to ask is: What type of advisor did you have?

A recent article by consumer advocate Scott Burns sums it well:

“According to the Bureau of Labor Statistics, 443,400 people were working as insurance sales agents in 2012. The 2014 annual report for the Financial Industry Regulatory Authority notes that it oversees 636,707 stockbrokers. So investors face an army of more than 1 million people who call themselves advisers but are primarily motivated by commissions, perks and sales incentives.

Both groups operate under the vague “suitability” principle — that they will sell investments that are suitable for their clients. They have fought year after year against being required to act as fiduciaries. Why? Simple. A fiduciary swears to act in the best interest of the clients and to put the clients’ interest before their own. That’s a pretty high standard.

The number of Registered Investment Adviser firms is about 11,000. That’s about 100 people who live by commissions and sales incentives for every person who has sworn to live up to the fiduciary standard. Those aren’t good odds.

I’m not saying that the public faces an army of 1.1 million money-grubbing dolts without scruples. I’ve known good people on both the brokerage and insurance sides.

But it’s still a numbers and behaviors problem. The odds that a person will meet one of the really good people are small. The odds that a person will meet one of the really bad people are also small.

The trouble is that both the brokerage and insurance industries have business models that require sticking the consumer with high costs. In brokerage, it’s called “yield-to-broker.” And the target is about 2 percent — from your money.”

CORDA Investment Management is registered with the Securities and Exchange Commission. As an RIA, we adhere to the fiduciary standard of care set forth by the SEC which requires us to act in our clients’ best interests.