Why Choose a Fee-Only Advisor?
When working with a financial advisor, it is important to work with someone you can trust. It is difficult to know who that is without spending a significant amount of time with him or her. It could take years. However, there are some simple ways to protect yourself and build trust more quickly.
First and foremost, work with someone who works for you, not some brokerage firm, insurance company or bank. If your advisor works for anyone but you, you will run the very high risk of getting advice that serves the best purposes of that institution.
When your advisor works for you alone, it means they have no incentive to recommend one investment or planning tool over another. They receive no commissions, finder?s fees, soft dollars, kickbacks, referral fees, or commission splitting. One hundred percent of their compensation comes from you, the client, in the form of fees. You pay them, they work for you.
This compensation method helps assure you that your advisor is recommending what is best for you not what pays them the most commission. If that advisor bases their fees on a percentage of your assets, you have the additional peace of mind of knowing that the advisor is economically tied to you. Your best interest and theirs are tied together. This can help you feel comfortable and build trust with your advisor now and over the long term.
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