By YOUNG MONEY Staff
21 October 2011

As the financial sector undergoes a major shift on multiple fronts, many Americans are left with no clear direction for financial advice. The New York Times suggests that many of the players have changed but the basics have remained largely the same.

The paper suggests that the recent scandal at UBS, a prominent and popular investment bank, illustrated the danger of basing financial decisions on the reputation of the firm offering advice.

The Times reports that UBS has decided, in the wake of this incident, to shift its attention away from investment banking toward wealth management. Reuters reports that Citgroup has taken a similar approach, shifting from referring outside agencies to internal programs, but these decisions highlight one of dangers of these financial institutions.

While UBS has no intention of losing money, it sees wealth management as a means to reduce its own risk. Customers must be certain to examine the structure of incentives for anyone they hire to advise them on their finances.

Ideally, investors would want to find someone who can act as a fiduciary so they can be more confident of the person's goals, but the even in this case people must be comfortable that their advisor listens to and takes into account their goals for their money.