If an “advisor” receives compensation based upon product sales, he or she may have an incentive to “sell” you high expense, high commission products rather than low cost, no commission products. You could wind up paying hundreds of dollars, thousands of dollars, tens of thousands of dollars, or even hundreds of thousands of dollars more than you would have otherwise over many years.

Leder Fiduciary Capital response: We never accept compensation from product manufacturers or any third party. Our compensation is solely from our clients in order to align our interests as much as possible with our clients’ interests. Because we are unbiased and objective, we are free to use what we believe to be the very best investment options for our clients.

Each of these products has very high costs. In our experience, these high-cost products (mainly because of their high costs) become subpar investments for investors. One commonality of these products is that the compensation to the “advisor” for these products is very lucrative. We are saddened by the use of these products in the “investment business.” We would be very, very leery of any “advisor” who had recommended these types of products to their clients.

Leder Fiduciary Capital response: We find these products to be very unattractive investment vehicles. We could never advise anyone to invest in these products. We would run not walk away from these high-cost products.

Ask your advisor if they are a fiduciary at all times and in all circumstances. The answer should either be a simple yes or an emphatic yes. Any other answer – especially any equivocation or dancing around the question – almost certainly means no. I would be careful of any “advisor” who is not a fiduciary at all times and in all circumstances.

Leder Fiduciary Capital response: Being a fiduciary is important because a fiduciary must always put your interests before their interest. Many people are surprised that some “advisors” do not follow the fiduciary standard but rather follow the suitability standard which allows the “advisor” to recommend a high cost, high commission investment even if a low cost, no commission similar investment is available. In our opinion, this is wrong and is not the right thing to do for people.

The answer should be a very clear no. If an advisor uses a suitability standard (instead of a fiduciary standard) then they may not be putting your interests first. There is also a risk that they are more focused on their economics rather than on your economics.

Leder Fiduciary Capital response: We always and in all circumstances use a fiduciary standard. We never use a suitability standard. With a fiduciary standard, we explicitly put our clients interests – your interests – first.

You probably would not want to use a lawyer who had not been to law school. You probably would not want to use a surgeon who had not been to medical school. Why would you use an advisor who did not have a rigorous, globally recognized business and investment education? Why settle for less?

Leder Fiduciary Capital response: Jason Leder has an MBA from Columbia University. The Columbia MBA program is globally considered to be one of the leading programs in business. In addition, the Columbia MBA is particularly noted for its strength in investing.

The CFA charter is considered by many to be the most rigorous and one of the most highly regarded investment credentials. In addition, the CFA Code of Ethics and Standards of Professional Conduct require a charter holder to place the interests of a client above their own interests. A charter holder must also act with integrity, competence, and respect. While considered less prestigious and less rigorous, we consider the Certified Financial Planner (CFP) to be an acceptable certification.

Leder Fiduciary Capital response: Jason Leder has a CFA charter. In addition, Jason Leder is honored to serve as a member of the Board of Directors for the CFA Society of Houston and as a member of the Board of Directors for CFA Societies Texas.  Previously, Jason served as the President of the CFA Society of Houston, before that as VP Programming for the CFA Society of Houston, and before that as the Treasurer of the CFA Society of Houston.

In our opinion, an advisor should explicitly say that they are fee only, receive no commissions, and receive no compensation from any third parties. If an advisor does accept commissions or third party payments, their compensation can be larger or smaller based upon which investments they recommend. In our opinion, this is a serious conflict of interest and is a potential source of abuse. A possible risk from accepting commissions and third party compensation is that an “advisor” may “advise” investments that generate the greatest economics for him or her but not necessarily what has the best economics for the client.

Leder Fiduciary Capital response: We are fee only and accept compensation solely from our clients. We accept no commissions and no third party payments. Our compensation does not change based upon what investments we recommend. This keeps us unbiased, objective and always 100% focused on our clients’ best interests.