Q: I read in the Mankato Magazine about working with a fiduciary and that they are different from other financial advisers in a significant way in that they have to put the client’s best interest in front of their own. Can you tell me who the fiduciaries are in the Mankato area? I would very much like to talk to one. I already have investments and need advice about them but I don’t want an adviser to try to sell me something else.
A: It can be a bit tricky to figure out who you’re dealing with in the world of finance, according to Mo Schriner of the Minnesota Department of Commerce.
“The term ‘financial adviser’ can be used in a variety of industries, including bankers, insurance agents, wealth managers, financial planners and other business professionals that would advise you and possibly attempt ‘to try to sell me something else,’ as you referenced,” Schriner said in a written response.
There are no regulations or requirements attached to the use of some of those titles. But there are legal requirements enforced on people who are “investment advisers” under a 1940 law, as there are for “brokers” of stocks and other investments. Under the Investment Advisers Act of 1940, investment advisers are defined as “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities … “ among other things.
“When you are working with investment advisers, those professionals are licensed and required to follow a fiduciary standard under state and federal securities to provide advice about securities investments to benefit you,” Schriner said. “Your investment adviser would charge you a fee for their fiduciary-based advice. Investment advisers are licensed and regulated at the state or federal level.”
So in return for that straightforward fee, you get advice that aims to put your interests first rather than, potentially, what provides a commission or other financial benefit for the adviser or his or her employer.
“The first, and most important step, is to find a fiduciary investment adviser who is licensed at the federal or state level,” Schriner said, providing recommendations to help people find one. “You can look up an investment adviser (a firm) or an investment adviser representative (a person) licensed at the federal or state level here by checking adviserinfo.sec.gov.”
Ask Us Guy took a look at the site, and it’s pretty slick. He clicked on “Individual” rather than “Firm” and then went straight to the location spot on the site and typed “Mankato” to see how well it worked. Nearly 200 names — from Dedinsky to Welp — popped up. A few of them, for whatever reason, were actually based in other cities ranging from New Ulm to Bismarck, North Dakota. But the vast majority had offices in Mankato or North Mankato.
The site immediately tells whether someone is an investment adviser, a broker or both and lists how many years of experience they have. Some names have “disclosures” attached that reference a customer complaint. Clicking on “more details” provides previous places a person has worked, the professional exams they’ve taken and more.
Schriner noted, too, that the federal Securities and Exchange Commission has a website with general information about investment advisers and advice on how to pick one at investor.gov/investment-professionals.
“And Minnesota consumers with questions or concerns about their investment accounts can contact the Minnesota Department of Commerce,” he said.
The agency’s email address is consumer.protection@state.mn.us and the phone number is 651-539-1637. People can also file a complaint at mn.gov/commerce/consumers/file-a-complaint.
“We are here to assist and protect Minnesota consumers,” Schriner said.
Contact Ask Us at The Free Press, 418 S. Second St., Mankato, MN 56001. Call Mark Fischenich at 344-6321 or email your question to mfischenich@mankatofreepress.com; put Ask Us in the subject line.