In the case of Fee-Only financial planners, one thing they are not doing is encouraging you to buy certain products because they can get commissions or bonuses from them. This can happen at investment firms where advisors are not held to high fiduciary standards. It is also possible that instead of being rewarded for steering clients towards investment products, advisors at some firms may face more difficulties at work if they don’t get clients to invest.
The Department of Labor is proposing new rules for professionals who give investment advice about retirement. All financial advisers are not duty-bound to give advice that aligns with your best interests.
While one would hope that having to adhere to stricter guidelines and put clients’ interests first would only be a good thing, there are some in the financial world who are not supportive. They say that it would raise the costs of seeing a financial advisor and might cause some advisors to avoid helping those who are not wealthy.
The Washington Post finance columnist Michelle Singletary points out that as with many things, it comes down to semantics: “An investment adviser who has a “fiduciary duty” must act in the best interests of clients. A broker-dealer is a firm or individual licensed to sell individual securities. These brokers and other investment professionals who are not fiduciaries don’t have to act in a client’s best interests.”
Bringing clarity to your finances requires an advisor who pays attention to all aspects of your financial life, has excellent communication skills, and has the commitment to be available when you need advice and support. Your needs come first when you work with Clarity Financial Planning.