Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has been all over the media lately with his plans to impose new regulation on the financial industry. One of the proposed changes to the current body of regulatory law includes the potential of designating brokers and other financial advisers as fiduciaries.

Now, you may have already thought that your broker or advisor was a fiduciary, which just means that the individual is required by law to act in your best financial interest. Well, if you thought that, you’d be wrong. Most brokers and financial advisors are not bound by a fiduciary responsibility to protect your money.

The only kinds of advisors that are bound by fiduciary rules are registered investment advisers, or RIAs, and certified financial planners.

My firm, Fabian Wealth Strategies, is a registered investment advisor that knows and respects the fiduciary relationship we have with our clients. In fact, the requirement that we steward your money with the utmost caution and care fits eminently well with our personal charter to preserve and protect your capital.

I don’t think Sen. Dodd’s proposal to make all brokers and financial advisors fiduciaries will end up in the final version of financial regulatory reform. The Wall Street lobby is too powerful to let that happen. You see, the big brokerage firms really don’t want to be responsible for your money the same way as RIAs.

I’ll leave it up to you to judge which type of advisory relationship you’d prefer, but let’s just say I know the one I prefer, and that’s the fiduciary responsibility of the RIA.

NOTE: Fabian Wealth Strategies is a SEC registered investment adviser, and is not affiliated with Eagle Publishing.