facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast blog search brokercheck brokercheck

Financial Advice from Utah's Credit Unions May Not be What it Seems

Credit unions are a big part of the financial services landscape here in Utah, much more so than in other states.  I use a credit union for both my personal and Five Seasons Financial Planning bank accounts, something I never even considered when living in the Northeast.  And many clients also use them for banking and loans.  But apparently the investment services and financial advice being offered by credit unions here in Utah are not necessarily what they seem.

According to a recent article on Financial Planning magazine's website, the Utah Division of Securities has fined and censured three of the biggest independent broker-dealers in the country - LPL Financial, Cetera Advisor Networks, and CUSO Financial Services - for violating regulations on how they may work with credit union customers through networking agreements.  When dealing with credit union clients referred to them, advisors employed by these three firms went out of their way to disguise that they were in fact brokers and not credit union employees, and that they really had their own financial agendas in mind.  Apparently these advisors answered the phone as credit union employees and gave out business cards with credit union names and logos.  And their firms engaged "in dishonest and unethical conduct by splitting commissions, profits and other compensation with the credit unions."

This is a new twist on an all-too-familiar story.  When money changes hands behind the scene in the form of commission-splitting and revenue-sharing arrangements between financial advice and product providers, consumers usually come out with the short end of the stick.  If you're looking for objective financial advice and transparency in the way you pay for it, start by looking for a Fee-Only advisor, one who is prohibited from accepting compensation in any form from anyone other than clients.

If a picture is worth a thousand words, a video must be worth many times that.  To view a short YouTube video explaining the benefits to Utah's consumers of Fee-Only, fiduciary, independent financial advice, please click the link.

About the Author

Paul Winter, MBA, CFA, CFP® is a Fee-Only financial advisor and fiduciary in Salt Lake City, UT. His independent wealth management firm, Five Seasons Financial Planning, provides professional portfolio management and objective financial planning services to individuals and families, and to their related entities including trusts, estates, charitable organizations, and small businesses.

Contact Paul