fiduciary / financial advice / financial adviser

How does your financial adviser get paid? And why does it matter?

“With markets in turmoil, investors need financial advice more than ever. Unfortunately, figuring out where to get it and how to pay for it just got a little harder” according to Jason Zweig writing for The Wall Street Journal. Until recently you could find this information about Certified Financial Planners from Letsmakeaplan.org. But the CFP Board of Standards will no longer disclose this info on the website.
Why does how your adviser get paid matter? Search for “fiduciary” on this blog fro a reminder.
Financial advisers on commission earn a slaes fee when you trade stocks or other securities, buy insurance, or other financial products. So they may not charge you for advice, you are paying indirectly when they recommend a product and you buy it. Hmmm… think about the implications.
A fee-only adviser charges either a one-time or recurring fee for advice and/or managing your portfolio.
The letsmakeaplan website had served as a fast way to find a Certified Financial Planner. Now… not so much.
A 2019 investigation by The Wall Street Journal revealed that about 6,300 CFPs listed on the website had faced criminal or regulatory problems not disclosed on the website.
While the CFP Board requires members to adhere to a code of ethics, there is little enforcement.

Once again, it is essential to ask your adviser directly if they serve as a fiduciary. Check out links on this blog.
Source: Financial Planning for Women