Financial advisor. Financial planner. Wealth manager. These are just a few of the titles that abound in the world of financial and retirement planning. Making a decision to choose an advisor you can trust to provide honest advice and help you achieve your goals can come with certain challenges. How can you make an informed decision?
Unfortunately, a title doesn’t tell you anything about the standard to which an advisor is held. This can be frustrating and confusing for many people. Rather than choosing by job title, instead ask your current or prospective financial advisor whether or not they are held to the fiduciary standard. Their answer will tell you if they truly have your best interests at heart.
If you’ve ever researched financial advisors, you may have noticed there are many different types of advisors from which to choose. Some of the most common types of financial advisors are brokers, fee-only fiduciaries, and independent financial advisors. It’s important to know the standards each type of advisor is held to as you’re deciding who to hire.
Here’s the breakdown:
● Brokers manage your portfolio but also sell financial products such as mutual funds or insurance policies, for which they earn a commission. They are not held to a fiduciary standard, so they may not always act in your best interest.
● Fee-only fiduciaries may charge a flat fee, or a percentage of your portfolio, but they are always held to a fiduciary standard, in which they are required to act in your best interest.
● Independent financial advisors have started their own financial firm. Most independent advisors act as fee-only fiduciaries, but some may act as fee-based advisors and sell additional financial products on a commission basis.
In general terms, a fiduciary is a person or entity who has the power to act for another in situations that require complete trust. When it comes to the financial industry, financial advisors who work for a Registered Investment Advisor firm must always act as a fiduciary for their clients. By law, a fiduciary advisor must be completely transparent and always act in their clients’ best interest. They are also obligated to avoid and disclose any potential conflicts of interest.
Additionally, the ongoing services and investment monitoring they provide also falls under the fiduciary duty. In other words, their job doesn’t end after the initial meeting or purchase. They must regularly review your accounts to help ensure your investments are in your best interest.
There are financial professionals whose services do not fall under the fiduciary standard. This doesn’t mean that they are out to steal your money and can never be trusted—far from it. These financial professionals who register with FINRA are held to a standard known as Regulation Best Interest (Reg BI). This is a step in the right direction, but doesn’t take things as far as the fiduciary standard for Financial Advisors who work for a Registered Investment Advisor firm that registers directly with the Securities and Exchange Commission.
There are several benefits to working with an advisor who serves in a fiduciary capacity. For one, they are open and transparent. Aside from the obvious goal of maximizing value for your money, working with a fiduciary will give you confidence that your advisor is working in your best interests rather than their own. They’ll give you their true, professional opinion (even if it’s not the answer you want to hear). This is extremely valuable when you’re facing a big life decision, whether it’s purchasing a second home, transitioning into consulting work, or retiring earlier than anticipated. Reviewing your entire financial picture, an advisor can show you the impact a decision may have on your future and how you can pursue certain goals.
By working with an advisor who holds to the fiduciary standard, you can be confident in your financial future. Clients have the power to ask questions and to demand the highest value for the service that advisors are providing. As a Registered Investment Advisor firm, we understand people’s reservations or even negative connotations toward the underlying motivations of some advisors. We want to assure you that you can trust in the fact that our relationship with you is built on integrity and putting your interests above our own.
Independent, fiduciary advisors do so much more than just pick your stocks. Working with an experienced financial expert can be a realistic sounding board to help provide you with a litmus test when you have questions or face a big financial decision. They actively coordinate the accumulation, distribution, and transfer of your wealth, as well as strategize the estate, tax, and financial planning areas of your retirement plan. An advisor who looks at the big picture of your financial life can help you optimize income and mitigate taxes in retirement.
For example, this type of advisor helps you create a retirement income plan that strategizes when you take your withdrawals and what accounts you take them from first; not to mention, they also design a Social Security strategy that optimizes your benefits, minimizes Medicare confiscation, and addresses long-term care so you can feel confident that you’re on the right track as you pursue your long-term goals. The objective advice of an independent fiduciary advisor can make an incredible impact on your financial situation in retirement.
If you want to feel empowered to make the best decisions for yourself and your finances, the answer is yes.
At Coign Capital Advisors, our primary goal is to attain suitable portfolio performance while also delivering customized solutions that enhance our method and help make your financial goals more achievable. Unlike large brokerages and wire houses, we are an independent firm that is not paid by commission or tied to any specific investment approach or products. Simply put, we choose investments based on your risk tolerance, circumstances, goals, and other components of your life, as opposed to how it can benefit us.
To get started today, send us an email at firstname.lastname@example.org or call 801-676-4570.
Coign Capital Advisors is a fee-based investment advisory firm based in Draper, Utah. Specializing in serving retirees, business owners, and entrepreneurs, the firm provides holistic wealth management that goes far beyond investment consulting and strives to attain suitable performance combined with solutions that make clients’ financial goals achievable. Led by J. Matthew Zundel, Robert P. Welch, M. Brandon Riley CFP®, Adam G. Lefler, Daniel R. Zundel, Courtland Adams and Brock Alvord clients receive a high level of service from a team with more than 90 years of combined experience. To learn more, visit www.coigncapital.com.
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