Choosing a Financial Advisor
"We all have dreams in life, but without a plan you're leaving it up to luck. Reaching these dreams starts with developing a sound financial plan."
Financial planning requires commitment, discipline and the guidance of an experienced, knowledgeable financial professional who will lead you through the process with honesty and integrity.
How do you choose the right financial advisor?
Choose an advisor who:
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Has experience working with people like you
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Has the ability to communicate effectively
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Views the advisor/client relationship as one of honesty and integrity
You may have heard about the difference between Fee-Only Advisors, like the members of NAPFA, and Fee-Based Advisors, or brokers.
Fee-Only Advisors do not sell financial products of any kind. They are compensated for one thing, and one thing only: their knowledge.
Fee-Only Advisors are held to a Fiduciary Standard , meaning that they work in your best interest only. Commission and Fee-Based advisors typically work under a Suitability Standard , meaning that they may work in the interest of others.
When choosing a Financial Advisor, always look for the Fee-Only registered trademark.
Why Fee Only
By choosing a Fee-Only investment advisor, you are eliminating financial conflicts and bringing transparency to your professional relationship. While brokers will offer financial advice, their compensation is based on a fee or commission for the financial products they sell.
A Fee-Only advisor is paid directly by you, the client. They do not receive any other form of compensation from your account. This eliminates any type of conflict of interest from a broker/dealer, insurance company or mutual fund family who markets specific financial instruments.
Your Fee-Only advisor serves as a fiduciary, which means they are legally required to act in your best interest. They can offer unbiased advice and a clear and straight-forward fee structure. But most importantly, you know that they are working for you.
"I tell people, if you are working with a broker, that broker's loyalty is to his employer, not to you.
When you're working with me, my loyalty is to you and to nobody else."
NAPFA Fiduciary Oath
The advisor shall exercise his/her best efforts to act in good faith and in the best interests of the client. The advisor shall provide written disclosure to the client prior to the engagement of the advisor, and thereafter throughout the term of the engagement, of any conflicts of interest, which will or reasonably may compromise the impartiality or independence of the advisor.
The advisor, or any party in which the advisor has a financial interest, does not receive any compensation or other remuneration that is contingent on any client's purchase or sale of a financial product. The advisor does not receive a fee or compensation from another party based on the referral of a client or the client's business.
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The advisor shall always act in good faith and with candor.
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The advisor shall be proactive in disclosure of any conflicts of interest that may impact the client.
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The advisor shall not accept any referral fees or compensation that is contingent upon the purchase or sale of a financial product.