Three Reasons Why to Select a Fiduciary Advisor
A Fiduciary Advisor Does Their Research
Fiduciary advisors must make sure their recommendations are based on accurate and complete information. That means they are required to thoroughly analyze your accounts, goals and circumstances before recommending that you buy an investment or use a particular savings vehicle. Fiduciaries must then monitor their recommendation to make sure that it remains appropriate for their client on an ongoing basis.
They Are Clear About Their Fees
Advisors who follow fiduciary requirements have to be upfront about all of the fees they charge and commissions they receive. This kind of transparency is critical because fees, expenses and commissions can be major detractors from your portfolio’s long-term performance.
Even a seemingly small annual fee—say, 0.75%—can cost investors tens of thousands of dollars in lost investment growth over a 20-year period, according to the Securities & Exchange Commission.[1]
Fortunately, the fiduciary standard discourages advisors from offering investment recommendations that cause clients to pay higher fees and commissions. As a result, working with a fiduciary can help keep your costs down and your savings up.
They Must Avoid Conflicts of Interest
Fiduciary advisors must disclose any instances in which they are compensated for making a certain recommendation. In fact, under the Department of Labor’s recently enacted fiduciary rule, advisors working with retirement accounts are barred from making recommendations that represent a conflict. For example, an advisor can’t buy a stock and then try to pump up the price by buying it for their clients’ portfolios, nor could they recommend a product that resulted in higher commissions or fees for themselves.
Our team here at Shore Financial Planning (SFP) always has our clients best interest in mind. As fiduciaries, we’ve taken an oath to prioritize your financial well-being above all else. We’ll treat you with the honesty and integrity you’d expect from someone with whom you are entrusting your future.