Why You Need to Work With a Fee-Only Advisory Firm
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 be professional, independent and supply sound financial information. In case you have not hired a Fee-Only financial advisor, you might not get what you signed up for.
There are more than 200,000 financial advisors in the United States and this number is expected to increase in the coming years. But of these, the fee-and registered with the Personal Financial Advisors are just about 2,000. Transaction-based financial advisers make their money from commissions which they make from selling financial products. But, fee-only advisory firms do not work on commissions as they don’t sell any products. Rather, their clients pay them a flat fee for the independent financial advisory services they offer instead from the investments they recommend.
A lot of the financial advisory firms are commission-based which means that their income is linked directly to the investments and financial products they sell to you. These firms might call themselves financial advisors but they are majorly 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. Therefore, it’s fairly tricky for you to assess whether the investment portfolio they’ve advocated 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. Therefore, customers know that fee-only advisers work to their best interests and aren’t connected to any investment product or business. 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 collect both commissions and fees, and they might also recommend some products endorsed by the companies that sponsor them.
A fiduciary is a fiscal expert who’s held out in trust and has the legal responsibility to put the clients’ interests above their own. Fee-only financial experts like Thomas Batterman are the only financial experts that work under a suitability standard. Federal regulators and the State regard fee-only financial advisors highly which gives you more reasons to choose Fee-only financial advisory firms.
Prior to picking a financial advisory company, do some due diligence and research on it. Ask numerous questions before you enter into a professional relationship with a financial advisory business.
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