Personal Investment Advisor: Is Your Interest First Served?

Your personal investment advisor is largely responsible for your financial success—or failure. Before you risk your hard-earned money, make sure that your investment advisor puts your interests first.

The Difference in Titles

Your personal investment advisor’s job title can give you a clue right from the start. Personal investment advisors fall into two categories:

  • Fiduciary – These advisors are legally obligated put your interests first. They include attorneys, CPAs (Certified Public Accountants), and RIAs (Registered Investment Advisors). They may also include CFPs (Certified Financial Planners) and financial planners.
  • Suitable standards – Stock brokers, registered representatives, and insurance agents will work to help you make money at a “suitable standard,” but they may put their firm’s interests before yours. However, that’s not to say that these advisors will put their firms before you. They want to keep their customers!
Other Good Signs

You must be able to distinguish the honest and open advisors from the secretive ones. Feel free to “interview” more than one personal investment advisor before you choose the best one.

When you “interview,” look for these positive signs:
  • Full disclosure – Financial advisors who are willing to disclose any personal conflicts of interest (such as their own investment in a firm or company they recommend to you) are more likely to be trustworthy.
  • Clear outline of commissions – Advisors who clearly outline the commissions and fees they take (if any) for their financial advice upfront are likely to be dependable.

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