Why a Fee-Only Fiduciary?
A fee-only financial counselor is someone who, in all circumstances, is compensated solely and directly by the client. No compensation is contingent upon the purchase or sale of any financial product.
A fiduciary is a person that acts on behalf of another person or persons to manage assets. A fiduciary owes to that other entity the duties of good faith and trust. The highest legal duty of one party to another, being a fiduciary requires being bound ethically to act in the other’s best interests.
Any financial professional who has a stake in the course of action that he/she recommends to a client faces an inherent conflict of interest and cannot be considered objective and unbiased. This is valid even if the advisor truly believes that he/she has only the best interests of the client at heart. In fact the advisor’s knowledge base is influenced by the employer who is encouraging the sale of the specific investments.
Unfortunately, the vast majority of people in the United States calling themselves “financial advisors” are actually financial product salespeople. They have a lower legal obligation than a fiduciary. Their recommendations only face a “suitability” obligation. The advice cannot be unsuitable for the investor. Some or all of their income is dependent upon their ability to steer their customers into investments that pay differing levels of compensation to the salesperson. Putting aside the conflict-of-interest factor, this limiting of choices, in and of itself, is often enough to impact the quality of the investment advice. Today these salespeople can and do include stock-brokers, insurance agents, accountants and attorneys, as well as financial planners. Many of their customers are not aware that their advisors are paid to generate commission revenues, or do not recognize the significance of this conflict. Working with a fee-only fiduciary ensures that these conflicts do not exist and your best interests are the only consideration.
How Can We Help You?
Brokerage firm, insurance company or bank hires revenue producer to sell products to customers
An employee owing allegiance to an employer who is responsible for sales goals and who is paid accordingly by their employer
Buys products and services with built-in sales revenues as a result of salesperson’s advice
Hires fiduciary advisor to research, prepare, implement and monitor a financial and investment plan based on the client’s circumstances, goals and values
Works for and is paid by the client utilizing no-load or low-load financial products
Provider of products selected by client’s advisor for optimal implementation of client’s financial investment plan