Assuming the quality of the item is the same (or even better), is there anyone out there who wouldn't want to save thousands of dollars on an investment in a big ticket item like a car or boat or house? I didn't think so.
Then why don't some of those same people care about saving thousands of dollars on maybe the biggest ticket item in their lives, their assets/investment/savings?
Folks, it's just this simple: If you work with a commission-based financial advisor, you will likely pay thousands more for financial 'advice' than you would if the advisor is fee-based, and the commission-based advisor will be of no better quality.
Make no mistake, in a commission-based environment, the investor pays the commissions, often as high as 5%. It may be an upfront charge, as in the case of a commission-based brokerage account, or it may be buried in fees and happen over the course of a few years, as in the case of many different insurance products the 'advisor' purchases for you within the account. (That's why such products, notably annuities, have big annual fees and multi-year surrender charges - you can't leave until you reimburse the financial institution for their costs.) Regardless, the investor pays more in this financial model.
On the contrary, if you work with an independent fee-based registered investment advisor, your investing costs will be far less, and the quality of the advice is likely to be far superior. The fee-based advisor isn't required to sell you something to keep making money. Your success is their success. And if you aren't happy with the results you can just leave and not have to worry about surrender charges or other fees. It also helps if the person is a Certified Financial Planner - they don't cost more, and at least you know they have the professional credentials to do what they do.
Save yourself thousands. Don't just accept the local only-guy-in-town or the friend of a friend. Find, interview, and use an independent registered investment advisor.
Showing posts with label RIA. Show all posts
Showing posts with label RIA. Show all posts
Friday, August 28, 2009
Wednesday, July 29, 2009
Investors Need Independent Advisors
In today's Wall Street Journal there's a very good article headlined "Wary Investors Are Seeking Out Objective Voices" by Anne Tergesen and Jane Kim. It essentially summarizes the merits of using independent financial advisors (like me) instead of people affiliated with financial institutions. The full article can be found at
http://online.wsj.com/article/SB10001424052970204423804574288130378749314.html#articleTabs%3Darticle
As noted in this article, Independent Registered Investment Advisors (RIA - again, like me) are held to a higher fiduciary standard to work in a client's best interests. They must fully and transparently disclose their costs and how their firm operates. Most provide a full range of financial planning advice for a percentage fee of assets under management and/or an hourly charge.
In contrast, brokers (affiliated people may call themselves financial 'advisors' or 'consultants' but in truth they are brokers) are in the business of selling their firm's preferred brokerage products to make commissions. They may not be working on a client's behalf but rather their own, and believe me, I've seen that happen dozens of times over the years. Of course, brokers do a great job of burying these commissions from sight through a variety of hidden fees.
I've said it many times: It will take an independent fee-based advisor years to make the same compensation that a broker makes with one product sale commission. Who do you think is more likely to want to establish a thoughtful, long-term client relationship?
The article also recommends people look for advisors who have the Certified Financial Planner credential (again - like me!) The testing, ethics, and experience required to obtain that designation are good indications that you'll be working with someone you can trust.
This article is a must-read and must-report-on for someone in my line of work. And to find out more about changing the way people invest, contact me at VW Advisors, West Des Moines, IA Phone 515-223-6068!
http://online.wsj.com/article/SB10001424052970204423804574288130378749314.html#articleTabs%3Darticle
As noted in this article, Independent Registered Investment Advisors (RIA - again, like me) are held to a higher fiduciary standard to work in a client's best interests. They must fully and transparently disclose their costs and how their firm operates. Most provide a full range of financial planning advice for a percentage fee of assets under management and/or an hourly charge.
In contrast, brokers (affiliated people may call themselves financial 'advisors' or 'consultants' but in truth they are brokers) are in the business of selling their firm's preferred brokerage products to make commissions. They may not be working on a client's behalf but rather their own, and believe me, I've seen that happen dozens of times over the years. Of course, brokers do a great job of burying these commissions from sight through a variety of hidden fees.
I've said it many times: It will take an independent fee-based advisor years to make the same compensation that a broker makes with one product sale commission. Who do you think is more likely to want to establish a thoughtful, long-term client relationship?
The article also recommends people look for advisors who have the Certified Financial Planner credential (again - like me!) The testing, ethics, and experience required to obtain that designation are good indications that you'll be working with someone you can trust.
This article is a must-read and must-report-on for someone in my line of work. And to find out more about changing the way people invest, contact me at VW Advisors, West Des Moines, IA Phone 515-223-6068!
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