Sang H. Lee CEO at DarcMatter, CrowdfundBeat  Sr. contributing guest editor, Investor suitability is a heavily discussed and regulated topic that falls within the realm of financial advisors and broker dealers. Investor suitability is the standard that brokers follow when searching and recommending specific investors to their clients. This is not the same thing as the ‘best’ possible investment for a specific investor or portfolio, which often ends with a conflict of interest. The suitability standard can be loosely defined as a legal benchmark requiring whoever is handling your investments to put you in touch with products that are suitable for your objectives, means and even age. This falls way short of the fiduciary standard which requires that they put you in touch with only the very best products and to act with your interests in mind – not their own. And the ability to fully exercise this fiduciary duty is further impeded when advisors for mainstream investment houses are heavily restricted to products and opportunities that are created internally and generate the most fees. Effectively, this creates a double-intermediation scenario in which money is redirected through fee-generating products into another fee-incurring opportunity such as a managed fund. Investors should be demanding for more than […]

Do Investor Suitability Standards Actually Protect Investors?: CrowdFund Beat.

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