Understanding Your Advisor Options
When seeking help with your FERS retirement planning, you'll encounter two main types of financial professionals: broker-dealers and Registered Investment Advisors (RIAs). Understanding the differences is crucial for making the right choice.
Broker-Dealers
Broker-dealers are licensed to buy and sell securities on behalf of clients. They are regulated by FINRA and are held to a "suitability" standard — meaning their recommendations must be suitable for you, but not necessarily in your best interest.
Broker-dealers are typically compensated through commissions on the products they sell, which can create conflicts of interest.
Registered Investment Advisors (RIAs)
RIAs are registered with the SEC or state securities regulators and are held to a fiduciary standard — meaning they are legally required to act in your best interest at all times. This is a higher standard than the suitability standard applied to broker-dealers.
RIAs typically charge fees based on assets under management (AUM), hourly rates, or flat fees, rather than commissions.
Why This Matters for FERS Employees
For federal employees planning retirement, the fiduciary standard is particularly important. FERS benefits are complex, and the decisions you make — about your retirement date, TSP withdrawal strategy, Social Security claiming age, and survivor benefits — can have a significant impact on your lifetime income.
Working with a fiduciary advisor ensures that the guidance you receive is truly in your best interest.
The Spivak Financial Group
The Spivak Financial Group operates as a fiduciary advisor, always putting our clients' interests first. We specialize in FERS retirement planning and provide transparent, fee-based guidance.