If you have your investment portfolio managed by a broker who works for a bank or a brokerage firm, you owe it to yourself to read the attached article, “Can your Edward Jones financial advisor really serve your best interest?”

The main problem with the broker-dealer format is that their business model is structured in favor of revenue generation, at the expense of providing the best possible investment advice.

Brokers should really not even be considered “money managers”, but instead “asset gatherers” gaining sales commissions from each product that they push onto their clients.  Most of the time, as the article points out, the brokers are not qualified to handle the investments for others.

I’ve written about the conflicts of interest inherent in the broker-dealer model several times before (click here for just one example).  There are two ways to avoid this conflict of interest.  One, hire an independent Registered Investment Advisor (RIA) like myself.  I’m not the only one, there are thousands of independent advisors who only get paid through a flat & transparent fee.

Two, invest on your own in a series of index funds that best meet your investment objectives (risk tolerance, time horizon, liquidity needs, etc.).  This will take some expertise in the initial creation of the portfolio, but the benefit to this approach is that even if the portfolio is not adjusted frequently (the key is that it has to be initially set-up correctly) it still will most likely outperform most other investment portfolios with identical investment objectives.

But please read the article for a comprehensive look at the conflicts of interest inherent in the broker-dealer business model.