Why We Don’t Take Commissions

In the investment profession you are either an investment advisor or a broker (including insurance). 

Here’s why that matters:

On Tuesday, the Labor Department proposed strengthening rules for financial professionals who make recommendations to individuals concerning their retirement accounts. Currently, brokers and insurance professionals must adhere to a suitability standard. The proposed change would force them to adhere to a fiduciary standard.

Suitability standard:

  • SEC (securities regulator): When your broker recommends that you buy or sell a particular security, your broker must have a reasonable basis for believing that the recommendation is suitable for you.
  • FINRA (regulator for advisors who sell insurance products): A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer.

Fiduciary standard:

  • Investment advisors have a duty of loyalty and care, and put their clients’ interests above their own.
  • Advisors must act solely in another party's interests.

Registered investment advisors are prohibited from buying a mutual fund or other investment products because it would garner a higher fee or commission. Under the suitability standard, if an investment is suitable for a client, it can be purchased.

Midwestern Financial Group: MFG is a fee-only, independent investment advising firm. We adhere to a fiduciary standard set by the Investment Advisors Act of 1940.

In addition, MFG adheres to the CFA Institute Code of Ethics:

  • Place the integrity of the profession and the interests of clients above your own interests
  • Act with integrity, competence, and respect 
  • Maintain and develop your professional competence

In sum, at MFG, our clients’ interests always receive the highest priority.