When you hire a financial advisory firm, you have some expectations from them on how you can save, invest and grow your hard-earned cash. The financial adviser ought to offer sound financial advice, be independent and professional. You might not get what you signed up for in the event you have not hired a Fee-Only financial advisor.
There are over 200,000 financial advisors in the United States, and this number is expected to rise in the coming years. However, of these, only about 2,000 are Fee-Only and are enrolled with the Personal Financial Advisors. Financial consultants who charge based on the transactions make their money from commissions which they earn from selling financial products. However, fee-only advisory firms do not sell any products thus they do not work on commissions. Rather, they charge their customers a flat fee for the independent financial advisory services they supply rather from the investments they recommend.
Most of the financial advisory businesses are commission-based which indicates that their revenue is linked directly to the investments and financial products they sell to you. These companies might call themselves as financial advisers however they’re primarily interested in promoting their merchandise. Therefore, they may give some suggestions on a few financial products more than many others since they want to earn a commission from them. Hence, it is relatively tricky for you to examine whether the investment portfolio they have suggested is most acceptable for your portfolio.
On the flip side, fee-only advisory companies like Financial Fiduciaries LLC, don’t make any commissions as they don’t sell any financial products. Thus, clients know that fee-only advisors work for their best interests and are not attached to any investment product or company. For this reason, they supply independent and impartial investment, and they don’t have any conflict of interest. They could openly recommend investments and products that are suitable for their customers.
But, watch out for companies that use fee-based instead of fee-only as these two aren’t similar. Fee-based financial advisors charge both fees and commissions plus they may also suggest some goods endorsed by the businesses which sponsor them.
A fiduciary is a professional in the financial field who is held out in trust and has the legal responsibility to set the interests of their customers above their own. Fee-only financial consultants like Thomas Batterman would be the sole financial experts that run a suitability standard. Federal regulators and the State have high regard for fee-only financial advisors which provides you with more reasons to pick fee-only financial advisory firms.
Do some due diligence and research on the fee-only financial advisory form prior to selecting a flourishing financial advisory firm. Ask many questions before entering into a professional relationship with a financial advisory firm.