Since 1940, regulations established by the U.S. Securities and Exchange Commission, have required that Registered Investment Advisors meet a fiduciary standard when advising clients. The fiduciary standard requires them to put their client's interests above their own and to act in their best interest. As a fee-only advisor, River Wealth Advisors adheres to the higher fiduciary standard, when advising clients about investments.
Broker-dealers, who are regulated by the Financial Industry Regulatory Authority (FINRA), had been held to a suitability standard. This lesser level only required that the broker reasonably believed that recommendations were suitable for clients. There was no requirement to disclose conflicts of interest to investors. Unscrupulous brokers could benefit from hidden fees or recommendations of investments with high costs and low returns without any retribution.