Which Regulatory Standard is Driving The Investment Advice You Receive?

In the financial services industry, two primary parties offer investment advice –  Registered Investment Advisors (RIA) and investment brokers – but they aren’t governed by the same standards.  Investment advisors are guided by the Investment Advisers Act of 1940, work directly for their clients and must place the client’s interests ahead of their own. On the other hand, investment brokers serve the broker-dealers they work for and must only believe that recommendations are suitable for clients as determined by the Financial Industry Regulatory Authority (FINRA).  What does this key difference mean to you? While the investment advice you receive from either party may seem similar on the surface, the standards by which each party is bound is decidedly different.   The Fiduciary Standard: A licensed Fiduciary, such as a Registered Investment Advisor (RIA), has a legal obligation to act in the best interest of their client and holds the RIA to a higher level of duty of care. For example, advisors are prohibited from making trades for their clients that result in higher commissions for themselves or their firms. They must do their best to ensure their investment advice is backed by accurate information, a thorough analysis and avoids potential conflicts of interest. The Suitability Standard: Unlike RIAs, brokers and insurance agents are held to a lesser standard referred to as the Suitability Standard. Under the Suitability Standard, the broker or agent is only required to sell investments which they believe may be suitable for their clients, but not necessarily what is in the best interest of the client. Note the key distinction in terms of loyalty between the Suitability Standard and the Fiduciary Standard in that brokers serve the broker-dealers they work for and not necessarily their clients. As of July 1, 2019, the Department of Labor (DOL) now requires investment brokers to act in the best interests of their clients and to provide fiduciary level advice but only when advising on retirement accounts. Assets held outside of retirement accounts will continue to be regulated under the suitability standard.  To understand if your best interests are being served by your current financial advisor, ask if they are regulated under the Fiduciary or Suitability Standard. At Rubin Wealth Advisors, we put the best interests of our clients first and hold ourselves to a higher, Fiduciary Standard. If you have any questions about your current investments or the investment options available to you, contact Rubin Wealth Advisors at info@rubinwa.com. 
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Matching Your Risk and Return: A Personalized Approach for Maximizing Your Financial Success
At Rubin Wealth Advisors, we believe that understanding your risk tolerance is the key to maximizing your financial potential. Traditional methods of categorizing risk with vague labels like conservative, moderate, or aggressive often lead to confusion. These terms can mean entirely different things to different people, which creates misalignment between your expectations and your investment strategy. That’s where problems can arise—and where opportunities can be missed.
 
We take a different approach. By using a precise, quantitative system to determine your Risk Number, we help you make informed decisions that directly benefit you. Your Risk Number is more than just a score; it’s a powerful tool that helps guide your financial strategy. If your Risk Number is 64, for example, both you and our team will know exactly what level of risk that involves and how it relates to potential returns. The guesswork is gone, replaced by clarity and confidence.
 
Here’s where it really benefits you: Understanding your Risk Number not only ensures that your portfolio is aligned with your comfort zone, but it also increases your chances of achieving a higher risk-adjusted rate of return over time. By matching your investments to your specific risk profile, you’re better positioned to optimize returns without taking on unnecessary risk—especially over a 3-5 year period, where market fluctuations can test even the most seasoned investor.
 
The process is simple and designed to serve your best interests. In just a few minutes, we’ll walk through a short conversation to determine your Risk Number. From there, we’ll craft an investment portfolio tailored specifically to you, ensuring that the level of risk is appropriate for your goals. This isn’t about avoiding risk entirely; it’s about taking on the right amount of risk so you can achieve the returns you need while remaining confident in your strategy.
 
By aligning your portfolio with your Risk Number, you gain the peace of mind to handle market volatility. You’ll know exactly how much downside risk is possible and what kind of upside you can expect. For example, a portfolio with a Risk Number of 64 might have a potential downside of -10% over six months but offers a possible 15% gain. This range helps you stay calm during downturns because you’ve already accounted for them, and it positions you to benefit when the market performs well.
 
We also stress-test your portfolio in various market conditions—such as economic downturns or inflation spikes—to ensure you’re always prepared. This proactive approach ensures your investments stay aligned with your risk tolerance, giving you the best chance for success regardless of what happens in the markets.
 
How does this benefit you? Managing risk properly allows you to maximize returns without exposing yourself to more risk than necessary. Over time, this careful balance increases the likelihood that you’ll achieve your financial goals—whether that’s building wealth, preparing for retirement, or preserving your assets.
 
At Rubin Wealth Advisors, a Boca Raton financial advisor, we’re committed to helping you achieve higher risk-adjusted returns. As a licensed fiduciary, we specialize in guiding clients through personalized wealth management strategies, ensuring your investments align with your long-term goals. Let’s work together to discover your Risk Number and build a strategy that sets you up for success over the next 3-5 years and beyond. Contact us today to get started.