Why You Need to Work With a Fee-Only Advisory Firm
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 advisor should be professional, independent and provide sound financial advice. 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. But of these, only about 2,000 are fee-only and are registered with the Personal Financial Advisors Association. Financial advisers who charge dependent on the transactions earn their money from commissions that 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 term themselves as financial advisors, but they are mainly interested in selling their products. 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 other hand, fee-only advisory firms like Financial Fiduciaries LLC do not earn any commissions since they do not 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 advisors like Thomas Batterman are the only financial experts that operate under 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.
Before choosing a fee-only financial advisory firm, do some due diligence and research on it. Ask several questions prior to entering into a professional relationship with a financial advisory company.