“The secret of change is to focus all your energy not on fighting the old but on building the new.” -Socrates
Starting January 1, 2024 Brian and Subhani will no longer offer securities through Crown Capital Securities, LP. What does this mean? Not much to most of our clients. Allow me to explain how we are regulated and registered/licensed.
Toro Bravo Investments, LLC is a state of Texas registered investment advisor. Under TBIA we charge fees to manage our clients’ assets as a fiduciary. You can access our ADV (Uniform Application for Investment Adviser Registration) by following the web address in the blue margin underneath our phone number. Toro Bravo is regulated by the State of Texas Securities Board.
If you have Schwab, Interactive Brokers, or accounts at Security Benefit, you’re doing business with Toro Bravo Investment Advisors, LLC and we are managing your account as a fiduciary money manager. This change has no effect on you.
We are not considered fee only advisors since Subhani and myself also offer insurance products as brokers. This is a non-fiduciary relationship that is commission based and not offered under Toro Bravo.
The Crown Capital Securities, LP relationship was a Broker/Dealer business.
This allowed us to offer other investments through a commission when that was in our client’s best interest. These offerings are not considered a fiduciary relationship but instead come under the SEC’s ‘Best Interest’ rules and regulated by FINRA.
We always do what is in the best interest of our clients. We follow some basic principles and individualized objectives that direct investment advice. For accounts that are true ‘buy and hold’ with little to no actual management (beyond annual review) and/or the sponsor pays the compensation, we believe the commission structure would be more cost efficient for our clients. We can offer some annuities under TBIA but they can lack some benefits under that structure and you incur additional direct costs.
In the case of stock, ETF and bond accounts that need weekly, monthly or several times a year of evaluation, management or trading then we recommend that we act as a true fiduciary (under TBIA) and the fee we charge is our compensation.
This aligns the incentives and reduces conflicts of interests.
The financial press bangs on the fiduciary drum like there is a wide conspiracy of commission-based advisors abusing investors. The implication is that changing to fee only advisor is the only way to end the greed of capitalism. This is untrue rhetoric and seems to be promoted by wall street firms trying to annualize their revenue.
All that said we decided to streamline our business by closing our relationship with Crown. For our clients who have accounts at Crown, please call us for options. In most cases we can move your accounts without needing to liquidate your positions.
Next month we will discuss Income and Stocks for 2024.
Social Security Hacks
Cost of Living Increase for 2024
In 1973 Congress passed legislation that provided cost of living adjustments or COLA’s for Social Security beneficiaries. In 2023 the COLA was 8.7%. 2024 COLA is 3.2%. Social Security benefits will increase starting January 2024.
What if you decide to wait to file for SS benefits, do you miss inflation increases? Inflation is included in your benefits calculation once you turn 62. (See Your Retirement Benefit: How it’s figured).
Sources Citations Bibliography:
1. Fiduciary definition – “A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.” -Investopedia
2. We encourage you to review our ADV particularly Item 10 Other Financial Industry Activities and Affiliations.
3. By definition, broker-dealers are buyers and sellers of securities, and they are also distributors of other investment products. -Investopedia
4. Regulation Best Interest (BI) is a Securities and Exchange Commission (SEC) rule that requires broker-dealers to only recommend financial products to their customers that are in their customers’ best interests, and to clearly identify any potential conflicts of interest and financial incentives the broker-dealer may have for the sale of those products. -Investopedia
5. FINRA is a self-regulatory organization under the SEC that writes and enforces rules for broker/dealer firms in the United States. See definition at Investopedia for more.
6. There is flexibility in pricing under TBIA when this is needed. The size of the account and frequency of trading have an impact on pricing.
Supplemental Disclaimers:
This article is informational only and is not investment advice. This is not an offer to buy, hold, or sell investments like securities or insurance products.
Securities and Investment Advisory Services are offered though Toro Bravo Investment Advisors, LLC. Life Insurance and Annuities sold as an insurance broker are not a fiduciary relationship and are not offered by Toro Bravo Investment Advisors, LLC.
Securities or Insurance are not FDIC/SIPC insured and investments contain risk plus could be subject to loss.
Losses could be short term or permanent. Numbers and figures illustrated are hypothetical in nature and past performance is not a guarantee or indication of future results/performance.
We are not affiliated with the Social Security Administration (SSA), Internal Revenue Service (IRS), or any Governmental Agency.
Do not rely solely on the Legal, Tax, or Financial information presented for it may not be suitable for your individual situation.
Consult your legal, tax, and/or financial professional before acting on any strategy or recommendation (i.e. major changes or before initiating the purchase, hold, or sale of any investment or investment strategy). Every individual’s strategy can differ depending on current circumstances and goals.