Financial Advice That Can Be Trusted

Planning for a secure financial future is a necessity, but accomplishing that goal successfully is challenging for most. There are so many choices, tools, and products, with big claims and promises of financial growth and security. With the extreme volatility of the marketplace in recent years, it's certainly wise to be wary, though equally unwise to do nothing for fear of making unfortunate or uninformed choices. Even seeking professional assistance can seem complicated and fraught with risk these days. Where does one start?

The first place to begin is with an understanding of the difference between a broker and a Registered Investment Advisor. Professionals in the financial business have the right to call themselves whatever they want, such as financial planner, financial advisor or consultant, but these terms really don't say much about who they work for and how they earn their money. This is important information to have.

A broker is a salesperson, selling stocks, bonds, mutual funds, and often, annuity products. Brokers get paid a commission based on the sale of the products, and only then, meaning they are not paid for giving objective advice. Though they may refer to themselves as advisors, the only advice they offer is the advice that will make them the most money in commissions and in the interest of their firm. Neither are they paid for servicing the products they have already sold, so clients can only expect to hear from them when there's a new product to sell.

Registered Investment Advisors (RIA) are not sales people and do not sell products. They are paid a transparent fee by their clients for professional advice and service. They do not earn commissions from the sale of products, so they can offer objective advice that is in the client's best interest at all times. A Registered Investment Advisor works only for the client without any conflict of interest of also representing a company with products to sell. They are motivated to ensure the client's success in order to maintain the relationship and the ability to keep the client's business.

For someone who is confident in researching and monitoring investment portfolios, working with a stock broker may be a good choice. For comprehensive advice and guidance that may include estate planning, retirement advice, insurance, and more, in addition to portfolio management, a Registered Investment Advisor is the way to go. Required by law to act in the best interest of the client at all times,  the advice of an experienced RIA can be confidently trusted.