A Fee-Only Advisory Firm-Why Work With One?
You have some expectations from a financial advisory company on how it is possible to save, invest and grow your hard-earned cash when you hire them. The financial adviser ought to offer sound financial advice, be independent and professional. 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. 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. Instead, their customers pay them a flat fee for the individual financial advisory services that they provide rather than from the investments they recommend.
A good deal of the financial advisory companies are commission-based which implies that their income is connected directly to the investments and financial products that they market to you. These companies might call themselves as financial advisers however they’re primarily interested in promoting their merchandise. Hence, they may suggest some financial products more than many others since they would like to make a commission from them. Thus, it is quite difficult for you to assess whether the investment portfolio they have recommended is most suitable for your portfolio.
On the other hand, fee-only advisory firms like Financial Fiduciaries LLC do not earn any commissions since they do not sell any financial products. Hence, clients comprehend that fee-only advisors work for their best interests and are not attached to any investment company or product. As a result of this, they give impartial and independent investment, and they do not have any conflict of interest. They could openly recommend investments and products that are suitable for their customers.
Nonetheless, search for companies that use fee-based instead of fee-only as these two are not 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 financial expert who is held out in trust and has the legal obligation to put the interests of their clients above their own. Fee-only financial consultants like Thomas Batterman would be the sole financial experts that run a suitability standard. The state and federal regulators respect fee-only financial advisers highly that provides you more reasons to select fee-only financial advisory companies.
Do some due diligence and research on the fee-only financial advisory form prior to selecting a flourishing financial advisory firm. Ask several questions prior to entering into a professional relationship with a financial advisory company.