fiduciary / financial advice / financial adviser / financial advisors

So you think you’re a good judge of financial advice?

The vast majority of financial advisers do not take advantage of their clients. BUT… “About 7 percent of U.S. advisers have misconduct records in civil or regulatory proceedings.” And previous studies have shown it is easy to cover up these bad records.
Squared Away Blog’s author Kim Blanton explains the study:
“A new study finds that various things can trip people up and make them trust an adviser who is giving out bad advice. These influences included a good first impression of the adviser. And one way for an adviser to make a good first impression is by initially confirming the client’s own views on investing before introducing poor advice.”
Why give bad advice? Advisers who are not fiduciaries may have an incentive to recommend costly products that pay them a high commission or qualify them for bonuses or other incentives like trips to Hawaii.
“The subject of this study – judging the quality of financial advice – is important at a time workers are carrying a heavy load of responsibilities for managing their 401(k) accounts, and the accounts are becoming more critical to their retirement outlook.”
Read the summary of the study and its conclusions at: https://squaredawayblog.bc.edu/squared-away/are-we-able-to-judge-financial-advisers/
And heed Kim’s conclusion after reading the academic study: “Left to their own devices, the public’s financial acumen is generally poor, and a good adviser will steer them toward sound decisions. But this research indicates that investors can get into trouble if they aren’t able to detect when they’re getting bad advice.”
So be skeptical, educate yourself (using this blog), and get a second opinion, just like you would before major surgery.
Source: Financial Planning for Women