Selecting a Trusted Financial Services Partner
Financial decisions are oftentimes complex and overwhelming. It’s no secret that a knowledgeable advisor can help by simplifying tax rules and outlining investment strategies that support your financial goals. But when it comes to selecting a trusted financial services partner, how do you find an advisor who will act in your best interest at every point in the process? The first step is to consult with an advisor who holds themselves to a fiduciary standard.
What is a fiduciary financial advisor?
An advisor holding themselves to a fiduciary standard must act in their client’s best interest and provide unbiased, lowest cost options that fit their clients’ needs. For some advisors, this has always been the standard by which they base their recommendations for their clients. However, not all advisors are required to act this way.
Not All Financial Advisors are Fiduciaries
Legally, anyone can call themselves a financial advisor, but not all financial advisors meet the strict credentials required of a fiduciary (credentials vary depending on state law and different professional codes of conduct). Financial service providers who are not required to uphold the fiduciary standard are held to a lesser legal standard of care called the “suitability standard.” For this to be met, investment recommendations from a non-fiduciary advisor generally fit the needs of the client, i.e. they are suitable for you. This approach sounds great initially, but these recommendations may have higher fees that can produce bigger commissions for the advisor.
Naturally, conflict can occur when there are multiple suitable options for a client, and the non-fiduciary advisor can recommend the option that provides more income to the advisor. For financial services partners holding themselves to a fiduciary standard, the personal income factor must be totally apart from what is recommended to their clients.
Ask your investment advisory if they are a fiduciary; they should be able to affirm their role and commitment to act in your best interests. By consulting with a professional holding themselves to a fiduciary standard at an RIA firm, like Storen Financial, you can feel confident knowing that your best interest is at the heart of everything we do.
At Storen Financial, as a fiduciary, we provide our investment and tax recommendations on a flat fee approach in advisory relationships. Click here to learn more about this approach.
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Want to learn more?
Here are a few more resources to help answer your questions…
How To Choose A Financial Advisor – Forbes
How Fiduciary Duty Impacts Financial Advisors – Forbes
Blog by Ronnie Jackson, CFA® – Financial Advisor
Learn more about Ronnie and the rest of the Storen Financial team here.