Looking for a financial planner to help you with your goals and give advice on your specific situation?
Here are some key considerations: Is your financial planner a fiduciary and how are they compensated?
What is a Fiduciary?
Sadly, not all advisors are required to put you first. Only financial advisors who are fiduciaries are required to act in the best interests of their clients.
A fiduciary is a professional entrusted to offer planning and advice or manage assets or wealth while putting the client’s best interests first at all times. Financial advisors who follow a fiduciary standard must disclose any conflict, or potential conflict, to their clients before and during the advisory engagement. Fiduciaries will also adopt a code of ethics and fully disclose how they are compensated.
Registered Investment Advisors (RIAs) are legally held to that fiduciary standard of care. By law, they must act solely in the best interest of their clients. To ensure your advisor or potential advisor is following a fiduciary standard 100% of the time, request to see their ADV (a form filed with the SEC), and ask them if they will sign a fiduciary oath. Wise Stewardship Financial Planning proudly follows each of those standards. Read our ADV and signed fiduciary oath.
It is important to note that non-fiduciary financial professionals can recommend products whose sales generate bonuses, commissions, or prizes for them, but can cost you significantly more in higher fees. It’s estimated by NAPFA (National Association of Personal Financial Advisors) that non-fiduciary advice costs investors up to $17 billion a year.
How is Your Advisor Compensated?
The way in which your financial planner is compensated can make all the difference in the recommendations they make for you. That’s because some advisors work under a standard that requires only that their recommendations be suitable to your particular situation. Other planners work under a fiduciary standard that requires advisors to consider what is in their client’s best interest. You may be wondering why your advisor would make a recommendation that is not in your best interest. That’s where the issue of compensation comes into play.
There are three basic ways in which financial advisors are compensated:
Through a commission-based model
Through a commission & fee model (sometimes called fee-based)
Through a Fee-Only model
Both commissioned and commission & fee advisors receive a compensation based on the specific financial products they sell to you. Because of the conflict of interest inherent in these transactions, these advisors may have difficulty putting the client’s interest above their own.
Wise Stewardship Financial Planning is Different
Not only are we fee-only and always act as a fiduciary (we prove it with a signed fiduciary oath), we personalize this process to your unique and individual needs. As a boutique financial planning firm, we are able to develop deep and lasting relationships with our clients helping them achieve their goals and dreams over time. We would like to help you navigate the financial planning seas so that you can live the life you want. We serve those who are surviving busy lives and help them learn to financially thrive. Your financial plan may be unique, and it may not look like anybody else’s, but it’s yours.
Financial planning is about relationships because a financial plan is not a one-time event. It’s an ongoing process.
You’re busy, your life is hectic, and there is a lot going on week to week and month to month. That’s exactly why periodic meetings with your financial planner throughout the year make a difference. There’s no way to capture everything that happened in your life in the last 12 months to present it to an advisor at your annual meeting — let alone have the advisor truly understand your thoughts about it.
Financial planning should be proactive, but a single annual meeting leaves you no choice but to constantly react to what already happened over the last year. Think about your business or career goals. How do you think you’d perform if you set your benchmarks for the year on January 1, but didn’t revisit them, or your progress toward them, until December 31?
Financial planning is an opportunity to invest in your life, and gives you a process for using your money wisely to get what you actually want now and in the future. Just like a personal trainer designs the proper program for your specific fitness needs and holds you accountable to staying focused on your goals, we do the same with your money because we want to empower you to make smarter, more informed decisions now that can produce dramatic results in the future.
Some of that value is more intangible than a list of deliverables. The smart financial decisions you make today (and the not-so-smart decisions you avoid) create a compound effect over the long-term: the more you do correctly today, the greater your level of success is likely to be in the future. The small adjustments we can show you how to make today, and our advice to help you optimize your financial life, can add hundreds of thousands of dollars to your net worth over your lifetime.
Before we decide to work together, let’s chat about what your financial circumstances and goals are. We’ll give you our honest feedback about where you are with regard to your goals and if we think we can help you achieve them. You’ll have the chance to get to know us and decide if we’re the right partner to help you take the next step. You can schedule your FREE consultation now.
Interested to learn more about the specifics of financial planning and Wise Stewardship Financial Planning pricing, click here. We look forward to having the opportunity to serve you!