Is Your Financial Advisor a “Fiduciary”?

Is your financial advisor a “fiduciary?” Or do they put their commissions ahead of your welfare?

It is still a little known fact that many advisors legally put their own commissions and profits ahead of what’s best for their clients. These advisors work for brokerages, banks, insurance companies, and financial planners, and often say things like “there’s no commission on this annuity” or “we put your interests first” but then don’t. A Federal analysis estimated that this costs investors billions of dollars each year! These losses are not from rules violations, fraud, or other misconduct – merely from what is standard, legal practice for many advisors. Clients often are lead to believe that their advisor is looking out for them, but in many cases they have no more allegiance than a car salesman. And, bad as this can be, it can get worse…in some cases, much worse.

Actual advisor misconduct may be much more common than you appreciate. This can include fraud, theft, unauthorized trading, churning, illegal transactions, and much more that could cost investors millions. A “surprisingly high percentage” of advisors have histories of misconduct, and not only stay in the business but nearly half go on to become repeat or serial offenders! Many even represent some of the best-known national firms, some of which are even reported to “specialize in misconduct…” are “…preying on unsophisticated investors” and “attract the broker who can generate high revenue at the cost of repetitive disciplinary violations.” Places like Florida have even more problem advisors drawn by the abundance of wealthy retirees. In Palm Beach, over 18% of advisors have records of misconduct, and even “BrokerCheck disclosures do not adequately warn the public about the actual risk created by brokers…” Could you have money at a firm like this and not even know it? What could it be costing you?

So should you be worried? How does your advisor measure up? Financial advisors need NO experience or training, just a few weeks’ study for a basic exam. Most never get real professional education. How expert is yours to give complex advice? Are you sure hidden commissions are not a big incentive for them and big cost for you? Are they even a fiduciary, legally required to put your interests first? Many if not most are not, and free to put their pocketbooks ahead of yours. Has your advisor been repeatedly flagged for misconduct, paid settlements, fines, or even been suspended, barred, fired, or had criminal investment-related convictions? If you would like to learn how to check this and more, I’ve written a free guide, called The 8 Big Mistakes to Avoid in Using a Financial Advisor. If you read it, you can learn to avoid red flags that could cost you big, and discover advisor selection tips that could be enormously valuable to you and your family. This financial education is free, but time may be short, and pressure for many “advisors” to take hard to spot commissions may have never been greater. You should make sure you’re in good hands, before it could cost you more than you may know. My report is free and yours for the asking.

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