The Great Recession of 2007-2009 crippled many Americans' personal finances and caused a lot of uncertainty when it comes to future financial planning choices.
"As a result of Dodd-Frank, the capital requirements of banks have increased dramatically. Banks have had to go through initial stress tests and ongoing stress tests. So the banking system is certainly shored up and the TARP program helped that immensely by injecting capital into both banks and into private corporations like General Motors. That helped stem the notion of rampant unemployment because people kept their jobs, and banks didn't collapse, and people didn't lose money. And it was good so there was stability there," said Paul Brahim, Chairman and CEO of BPU Investment Management Inc., and a member of the Greater Pittsburgh Financial Planning Association board of directors.
He talked about some of the changes in our financial systems for consumers, the markets, and regulators, since 2008 and how to make sound investments with the right kind of advisor.
It's important to know what risks you're willing to take with your money, to know what questions to ask in order to find the right financial planning professional, and to understand that not all financial professionals have the same obligations to their clients.
"Essentially the financial advisor has to subordinate their own interest or the interests of their firm to the best interests of that client," said Brahim "In theory it requires very careful ongoing monitoring and a very careful line of communication between the client and the advisor to make sure everything works correctly."
For financial broker-dealers, their legal responsibilities are to generate revenue and profit for the company that they work for.
"So their fiduciary duty is to their corporation not to their customer. Now a conscientious and competent broker will take on the mantle without the legal requirement of behaving in the best interest of the client, because they'll keep them as a client for a long time."