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Can Everything You Need To Know About Money  Possibly Fit On A 3x5 Index Card? - Money Rule #6

Can Everything You Need To Know About Money Possibly Fit On A 3x5 Index Card? - Money Rule #6

August 14, 2021

Money Rule #6 – Is Your Financial Advisor Licensed to act as a Fiduciary?

A Financial Advisor acting under a “fiduciary standard” is required to provide you with financial advice and products that are solely in your best interest. These products and services are paid for typically on a fee basis, which can be assessed on assets under management, or in the case of “fee only planners”, by an hourly or “per plan” fee schedule. This is in contrast to advisors who offer products and are required only to make certain the products and services they provide are “suitable” for their clients, and are generally paid a commission. Not to say that your commission-based advisor doesn’t have your best interest at heart, but what questions should you ask to make certain? 

Questions You Should Ask Any Prospective Advisor

Whether an Advisor is fee-based or commission-based, he or she should always have your best interest at heart. Here are some questions you should ask any prospective advisor, or your current advisor, in order for you to make an informed decision as to whether they are a good fit for you, your family, or your business:

  1. What fees are involved? Some costs of investment products and services are transparent, some are not. Make sure you are clear about how much of the money you are investing is actually going to work for you versus what the fund company/advisor receives.
  2. How often will I receive guidance (if at all), who will be providing it, and how much will it cost me? Sound financial advice over a long period of time can make a big difference in your present and future lifestyle and be well worth the money spent.
  3. How can I qualify for lower fees?
  4. What other services/benefits are available to me at my current fee level? Or at other levels?
  5. Is there an “introductory” period, with fees to come later for the services I’ve signed up for today?

Never be shy about calling a company or asking an advisor these questions. You’ll find most of them happy to answer these or any other questions you have, including Sherpa Financial.

 (Inspired by: “The Index Card: Why Personal Finance Doesn’t Have To Be Complicated” by Helaine Olen and Harold Pollack; Random House, 2016)