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  • /Is all Financial Advice Alike? An Article for Investors

Is all Financial Advice Alike? An Article for Investors

Is all Financial Advice Alike?

Is your advisor in the sales or the advisory business? There are very important differences that you need to know.

For many investors, finding the right advisor for finance and investments is not an easy task. How do you know how qualified and smart an advisor is? What do you need to look – and look out – for?

  1. Does your advisor put your interests first, at all times?
  2. Do you know exactly how much you pay for their advice?
  3. Does your advisor monitor your investments and let you know when changes need to be made?

If you answered yes to all of these questions, good for you! If you answered no, or are not sure, take heart – you are not alone. Read on!

Most investors are not well prepared for the investment role that they are asked to take on, whether it is deciding which which funds to select in your 401(k) fund or IRA, what to do with the money you’ve accumulated (whether to roll it over, what to invest in if you do roll it over, when – and critically, how much – to take out so that it will last as long as you live), or how much to put into a child’s college plan.

Whether an investor has great wealth to invest and a complex tax and estate plan to manage or a more modest goal, the right advisor can be an invaluable resource – and the wrong one can be the reason for higher investing costs, lost opportunities, and even failure to fulfill your financial goals.

The playing field is not level. Investments have become so complex that there is an enormous gap in knowledge between even the savviest (but non-professional) investors, and Wall Street pros. The gap between investors and investment professionals is similar to the gap between patients and doctors or clients and lawyers. You wouldn’t do surgery on yourself or defend yourself in court, would you? You entrust your medical and legal wellbeing to the doctor or lawyer. They must act in your best interest.

The same principle applies to your financial future – as an investor you entrust your money and your financial goals – your future – to financial advisors. It is reasonable to expect that the advisor(s) act in your best interest – and most investors do believe this. And there is the rub. Some advisors are required by law to act in your best interest, while others are permitted by law to act in their own, or their firm’s interest. They look alike, sound alike and many have the same title, so how can you tell the difference?

We are out to level that playing field. Knowledge is power! This blog kicks off a series of articles intended to arm investors with more of what you need to know, including how to find an advisor, on order to achieve your investing goals.

Armed with the facts, you can make better choices of advisors, clarify goals and understand some of the conflicts of interest in play on Wall Street – and that is essential if you are to achieve all you dream of.


- – – Kathleen M. McBride