“Consumer confusion abounds,” the committee told Clayton. “Consumers attribute their confusion in large part to the brokers’ use of titles such as “financial advisor” and “financial consultant.”
This confusion, the committee claimed, is exacerbated by advertisements from broker-dealer firms, such as thoe following:
• “Our Clients’ Interests Always Come First.” [Goldman Sachs website December 22, 2017].
• “Our financial advisors are committed to putting your investing needs, wants and priorities first.” [Merrill Lynch website, December 22, 2017].
• “We address every dimension of your life and your goals—investments, business, passion and legacy—to develop a plan that’s truly personalized for you. It’s precisely what you need today and always. Advice. Beyond investing.” [USB website, December 22, 2017].
By law, brokers are held to a suitability standard that requires only that a product is suitable under but are only allowed to over offer advice if it is “solely incidental to the sale” without registering as an investment advisor. In contrast, investment advisors have an explicit legal fiduciary duty under the law that requires them to put a client’s best interest first both in terms of investment selection and cost.