Does your financial advisor have your best interest at heart?

This was a remarkable week for guest posts, here’s the latest from a partner –

When you need financial assistance and want to invest you need to find a professional who can successfully balance the quest for sound advice with the need to make a living. There have been several scandals recently whereby financial advisors put their own needs first, at the detriment of the clients, losing them millions in ill advised investments. To avoid this you need to find an advisor who is a fiduciary- someone who is legally required to put your interests first. Only registered investment advisors are obliged to adhere to this standard so a request to provide certification is reasonable.

A broker or advisor who works for commission is not bound by this fiduciary code; they are only obliged to assure that that an investment is suitable. However, it can be a mistake to assume that your advisor has your best interests at heart purely because they are a fiduciary. Although they are obliged to act in the best interests of the client there are many times that they act otherwise due to increased returns available. For example, if you win big at a site like www.androidcasino.ca your advisor might wrongly assume that because you won the money you would be happy to invest it in a high risk scheme rather than in a solid, long term investment.

To ensure your best interests are always paramount you need to exercise control over your portfolio and have ongoing contact with your advisor. A registered financial advisor is not allowed to charge commissions for investments; instead they charge a flat fee or earn a percentage of the assets they are managing. This helps to remove conflict of interests and stops them from following a hot tip or backhand that will benefit them rather than you, as no option will compensate them more than the other.

Some in-depth research into your potential financial advisor’s history is always recommended and you can determine whether they have a history of negative qualities such as:

• Selling a product instead of advice
• Maximised risk regardless of goals
• Failed to maintain basic investment and fiduciary standards
• Losses that exceeded the standard benchmarks

If these are prevalent qualities rather search for someone with a better track record and who you are confident will have your best interests at heart.