There are a lot of professionals out there with the title of financial adviser. But just because an individual hangs that label above their desk doesn't mean they necessarily have your best interests at heart. What you have to do is make sure that every monetary decision they make with your wealth is done in your best interest-not theirs. How can you know this? A lot of it has to do with finding out what their real title is. If they are a true fiduciary (meaning they must put your interests ahead of their own), their title will be the key.
In the high stakes world of finance, there are two standards. One is the fiduciary standard, which means your interests come above all else. This is what you want your financial adviser to be held to. Basically what that means is this. Say there are two investment opportunities. One will likely result in your money growing to $1 million over a certain period of time and the other will likely result in your money growing to $500,000. A true fiduciary will pick the one that will net your the million. Someone else, one only held to a suitability standard, meaning they must only vow to use your money to create suitable investments, could choose the other one if it meant a higher commission for them.
You can see how much money it could potentially cost you to choose the wrong financial adviser. Because most people inherently trust the person they put in charge of their money, they never consider that they might be better off doing some research into how that money is being invested. If you are wondering whether or not the person you've put in charge of your own finances is putting your interests above their own, you can look at their overarching job title as a hint. If they are an attorney or a certified public accountant, they are committed to upholding the fiduciary standard, meaning your interests must always come first. The same goes for a registered investment advisor. An insurance agent, registered representative, or a stock broker is likely to put commissions ahead of your best interests.
If you have a financial adviser and you aren't sure whether they're trustworthy, there are some questions you can ask to put your mind at ease (or indicate that you need to find someone else to handle your funds. Ask them point blank if they are required to put your interests ahead of their own at all times. If they claim that they are, have it put in writing. Furthermore, ask them about how they make money and make sure that none of those methods of payment would have a conflict with treating your interests as paramount.
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