Turn on the news on any given day and you’re likely to hear a barrage of negativity that can fill you with worry. Of course, the financial world is very much a part of this notion as turbulent markets and consumer confidence seem to ebb and flow like ocean tides. In fact, it can be difficult for the average investor to feel comfortable investing their hard-earned money in such a tumultuous environment.
The good news for investors is that you are in no way alone. Particularly in light of the financial crisis of 2008, significant steps have been taken at both the regulatory and firm levels to better ensure investors are well taken care of and that their best interests are always the primary concern of any investment firm or manager.
Legislative Safety Mechanisms
Often times, much of what we deem as good and beneficial rises from the ashes of disaster. Although it would be nice if we could skip passed learning from our mistakes and just simply instill safety and security mechanisms just because they’re logical and needed, human beings often need to be shown our shortcomings before implementing change.
In the financial services industry, both a scandal and a crisis have triggered those needed safety mechanisms to help provide additional security for investors. As a result of the Enron and Arthur Andersen downfall towards the beginning of the century, the Sarbanes-Oxley Act was enacted to better ensure transparency and corporate responsibility within the economy. Similarly, the Dodd-Frank Act shortly followed the 2008 financial crisis to create wide-sweeping guidelines and procedures that were specifically designed to help protect the individual investor.
Aside from regulatory measures, registered investment advisory firms are required to have significant safeguards in place to help protect a client’s best interest. First and foremost, the registered office should have an in-house compliance officer that monitors the actions of the investment adviser representative and should review each trade to make sure it is appropriate for the risk tolerance, time horizon, and overall financial goals of a particular client.
Between regulatory and firm-level safety measures, investors should feel more comfortable knowing that the financial guidance they are provided by a trusted advisor has multiple levels of oversight to help ensure sound decisions are being made.
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Gary Marriage Jr. is the founder and CEO of Nature Coast Financial Advisors, which educates retirees on how to protect their assets, increase their income and reduce their taxes. Marriage is a national speaker, delivering solutions for pre-retirees, business owners and seniors on the areas affecting their retirement and estates. He is an approved member of the National Ethics Bureau, and has been featured in “America’s Top Hometown Financial Advisors 2011” and was selected to contribute to a book with Steve Forbes titled “Successonomics”
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