Exactly Why Your Broker May Be Dangerous


At The Motley Fool, we champion the individual investor. However, sometimes we do-it-yourselfers need some help. As our resident retirement expert Robert Brokamp has written:

We firmly believe that you can learn all you need to know about personal finances. It just takes time (and a little curiosity about the topic helps). But if you find that you're just not getting around to taking care of business, then get an advisor. The money you pay her will be worth the bigger nest egg, reduced debt, lower taxes, sufficient insurance, and peace of mind.

But be careful out there, because your advisor may have an agenda. You still have to do your homework. One critical part of the assignment is knowing your advisor's incentives. A key distinction is whether your advisor is a Registered Investment Advisor (RIA) or merely a broker. The former has a fiduciary responsibility to you (a very good thing). The latter does not.

Watch this Youtube video for a satirical rundown of the difference.

We hope you enjoyed the show. If you're craving some stock ideas to go with your investor education, check out our popular free report "5 Stocks The Motley Fool Owns -- And You Should Too." It includes detailed write-ups of companies worth your due-diligence time. Just click here to read it now.

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