Changes in the brokerage industry can cause a broker to move from one brokerage firm to another. Moving your business with the broker may not be in an investor’s best interest.
A source of much anguish for the brokerage community, new rules could require brokers to answer to the same fiduciary responsibility as advisers.
Brokerage firm compensation plans can drive broker/advisor behavior. Educate yourself about your advisor’s compensation plan to ensure your best interests are represented.
While some Brokers make recommendations on a genuinely “needs based” analysis, many others may have financial incentives to steer you toward one investment vehicle over others.
Financial incentives and administrative burden may cause some Brokers and Advisors to neglect the proper servicing and education of their investment clients.
There are a few standard sales or distribution models employed by the Broker-Dealer and Investment industries. Each model compensates the broker or planner in a different manner. Though most still incent the broker/advisor to seek out investors with larger amounts to invest.