Offbeat article from Forbes.com. Here’s an excerpt, then the link..
A bombshell new survey from the Infogroup/ORC concerning what Americans believe about financial advisors and stockbrokers has the potential to turn the entire industry on its head.
We’re not talking semantics here, we’re talking about a fundamental confusion that afflicts more than two thirds of the investors in this country. This is a landmark survey because understanding the difference between advisors and brokers should be a sine qua non for investors before entering into any financial relationship.
According to the poll, which came out on September 15, an overwhelming majority of investors do not understand the fact that stockbrokers are in the business of selling them things while advisors are in the advice business.
Let me give you the data first:
* 76 percent of investors are wrong in believing that “financial advisors” – a term used by brokerage firms to describe their salespeople — are held to a fiduciary duty.
* By contrast, 75 percent of investors think the fiduciary standard is in place for “financial planners” and 77 percent say the same about “investment advisers.”
* Over three out of five American investors mistakenly believe that stockbrokers are investment advisers.
The survey group included around 2,000 or so people, half men and half women. How is it possible that there is such a major misunderstanding about the difference between advisors and brokers?
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