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No matter what the economy looks like, it’s always a good idea to have an honest, skilled financial advisor on your side. The big names in finance sure make it hard to get a straight answer about how their team serves you, but there are two things you should definitely look out for when shopping around for a new financial advisor.
Katie Fischer, CFP® made an appearance on FOX59’s Indy Now program to talk about two terms you should know: fiduciaries and fee-only financial advisors. Check out the clip below to get those tips straight from Katie herself.
What is a fiduciary?
“A fiduciary is legally obligated to do what’s in the best interest of their client,” says Katie. Fiduciaries are people or organizations that are held to high standards of ethical behavior, so they always act in your interests rather than their own interests or the interests of the company they work for.
For example, a financial advisor who is not a fiduciary may be encouraged to offer you a service or product because they will receive a bonus if they sign you up. Fiduciaries, on the other hand, don’t have incentives or conflicts of interest when offering you financial advice.
“It’s important to keep this in mind when you’re hiring a financial advisor because not all advisors have to follow the fiduciary duty,” explains Katie. “You want to make sure that person is actually in your corner when you’re making lifelong financial decisions.”
What is a fee-only financial advisor?
“Fee-only advisors are paid exclusively by their clients,” says Katie. “They’re not paid to sell you products, they’re not paid by any other companies. They’re truly in your corner.”
Since a fee-only advisor’s paycheck is paid by you, the client, you can rest assured that they are always acting with your interests at heart. They can’t phone it in — they have a vested interest in actually providing value for your financial life.
“When you come on board with a fee-only advisor you’re going to know up front what you’re going to pay and how that advisor is being compensated,” says Katie. “It’s all very transparent, and that’s not always the case with financial advisors.”
For an example of how transparent those fees should be, head to Market Street’s own fee breakdown. You can easily calculate exactly how much a relationship with our fee-only advisors will cost, and the value they bring to the table.
Get a fiduciary and fee-only financial advisor in your corner.
Working with a fiduciary and a fee-only advisor is the most transparent way to manage your financial life. They bring honesty and integrity to your financial relationship, which is one heck of a guarantee when you’re making decisions that will affect your entire life.
Related: Investing for Your Young Children: How to Balance Proactive Saving & Financial Education