Independent vs. Captive — Why It Matters More Than You Think
Most investors never ask if their advisor is independent. They assume advice is advice.
A captive advisor works for a company that owns or limits the products they can recommend. Their job is to operate within that platform’s rules and compensation structure.
An independent advisor, by contrast, has flexibility to select custodians, funds, and strategies from across the marketplace based on what fits the client best.
In both cases, advisors are required to disclose and manage conflicts of interest under applicable regulations.
Here’s what most people miss: advisors at captive firms legally owe their first duty to their employer. Their fiduciary duty runs through the firm’s playbook, not directly to you.
It doesn’t mean they’re dishonest — it means they have boundaries you’ll never see on the brochure.
If you value broader choice and fewer institutional constraints, it’s worth asking your advisor what “independent” really means in their practice
