By: Colleen Weber
Investment / News and Updates
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By Colleen Weber, CFP®, CPA
There are financial advisors everywhere you turn. The problem is not finding one, but finding the right one—someone you can trust to provide honest advice and help you achieve your goals.
Unfortunately, whether someone calls themselves a financial advisor, financial planner, wealth manager, or financial consultant, it doesn’t tell the consumer anything about the standard to which the advisor is held. This can be incredibly confusing for many people. It’s important to not look for a particular job title but ask your current or prospective financial advisor whether or not they are held to the fiduciary standard. Only then will you know if the advisor truly has your best interests at heart.
What Is A Fiduciary Anyway?
A fiduciary is like a trustee, someone who is given and accepts the responsibility of managing assets for a person, usually a client. The primary duty of a fiduciary is to put your needs first and to give advice and recommendations that will benefit you. This duty protects you from conflicts of interest. For example, fiduciary duty prevents an advisor from making an investment with your money solely for a kickback commission. This standard includes providing guidance that is unbiased, is considered beneficial to you, and fees that are clear and up-front. This gives you confidence that your hard-earned money is in good hands.
Why Should You Work With A Fiduciary?
Let’s look at the benefits of fiduciary rules in more detail.
1. Transparency And Eliminating Conflicts Of Interest
Individual Americans spend hundreds of thousands of dollars in fees and commissions over their lifetime, (1) not all of it warranted. Aside from the obvious goal of maximizing value for your money, working with a fiduciary will give you confidence that your advisor is working in your best interest rather than their own. As fiduciary rules become increasingly strict, financial advisors will need to be up-front about how they will help you invest. This means no more too-good-to-be-true sales pitches with hidden fees and convoluted fine print. Advisors will need to be transparent about the various options available to you.
2. You Get To Call The Shots
The bottom line is that by working with an advisor who is held to fiduciary standards, you are empowered to make the best decisions for you and your finances. Clients have the power to ask questions and to demand the highest value for the service that advisors provide. As a company in the financial world, we understand people’s reservations or even negative connotations toward the underlying motivations of some advisors. We want to assure you that you can trust in the fact that our relationship with you is built on integrity.
3. Comprehensive Coordination
Independent, fiduciary advisors do so much more than just pick your stocks. An experienced financial expert can be a realistic sounding board to help provide you with a litmus test when you have questions or face a big financial decision. Fiduciary advisors are required to create the most sensible plan for each client, no matter what. They’ll give you their true, professional opinion (even if it’s not the answer you want to hear). They actively coordinate the accumulation, distribution, and transfer of your wealth, as well as between the estate, tax, and financial planning areas of your retirement plan. An advisor who looks at the big picture of your financial life can help you optimize income and mitigate taxes in retirement.
For example, this type of advisor helps you create a retirement income plan that strategizes when you take your withdrawals and what accounts you take them from first; not to mention, they also design a Social Security strategy that optimizes your benefits, minimizes Medicare confiscation, and addresses long-term care so you can feel confident that you’re on the right track as you pursue your long-term goals. The objective advice of an independent fiduciary advisor can make an incredible impact on your financial situation in retirement.
Do I Need A Fiduciary?
If you want to feel empowered to make the best decisions for yourself and your finances, the answer is yes.
At Colleen Weber CPA, CFP, we pride ourselves on being a fiduciary, fee-only firm and upholding the highest integrity. Whether you’re looking for an advisor for the first time or have been burned by bad financial advice in the past, we’re here to help you create a solid plan that helps you achieve your goals. To get started, book a free introductory meeting online!
Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.