Rolek Retirement Planning

The Fiduciary Financial Advisor Difference | Pennsylvania Retirement Planning

As fiduciaries regulated under the Investment Advisers Act of 1940, independent Registered Investment Advisors are held by law to the highest standard of responsibility to their clients, which upholds them to always act in their clients’ best interests. 

If you are thinking about hiring a financial advisor, be selective. Only hire a financial advisor who is a fiduciary in all casesBefore hiring a financial advisor, request they sign a statement confirming they will act as a fiduciary in all cases and will not receive any hidden commission or hidden fees throughout your relationship. This is a critical step to protect your financial security. A fiduciary financial advisor will gladly sign a statement such as this.

Working With A Fiduciary Financial Advisor - Three Key Differences:

1 - No Hidden Commissions or Hidden Fees:

  • Do not work with a financial advisor who gets paid hidden commissions or hidden fees. Hidden commissions can and do reduce the quality of the financial advice provided. Hidden commissions pit the client and the advisor against each other as adversaries. Unfortunately,  the client is often unaware of this and thinks the commission-driven advisor is looking out for their best interests. In general, the higher the commission, the more money the "advisor" makes for selling the product, and the worse the product is for the client. Fiduciaries do not receive any hidden commissions or hidden fees. Fees are simple, openly communicated, transparent, and are not contingent on the client purchasing certain products or services. Fiduciary financial advisors are real financial advisors. 

2 - No Parent Company Bias:

  • Fiduciary financial advisors do not recommend one-size-fits-all solutions. They do not come to the table with pre-packaged products offered to the masses by a parent company. They do not meet you already knowing what they are going to try to sell. After assessing your unique needs, a fiduciary financial advisor will conduct extensive research to create a plan and provide the best possible solution for your unique situation given all available options in the open marketplace. Fiduciaries have a legal obligation to act in your best interest in all cases, which includes working hard to find and provide whatever options are best for you.

3 - Fiduciaries Work For You:

  • Financial advisors who are not fiduciaries will generally do the best they can for their clients given the limitations they have imposed upon them by their parent company. But the parent company is the one who signs the paycheck. As a result, the non-fiduciary advisor can wind up getting stuck having to navigate between a client's best interest on the one hand and needing to sell enough of their company's proprietary products to keep their job and provide for their family on the other. It's messy. Further, the parent company has a fiduciary duty to its shareholders, and what's best for shareholders isn't necessarily what's best for clients. Even if all parties involved are trying to do the right thing for each other, again, it's messy. Fiduciary financial advisors work for you. The only needs that matter are yours - not passive shareholders, not some parent company's management, just yours. It's a clean and simple relationship.

Safety Tip: 

  • Many financial advisors will claim to be a fiduciaries, but in reality they are only fiduciaries some of the time. It's critical to select an advisor who is a fiduciary all of the time. Before hiring an advisor, ask them to sign a statement attesting that they will work as a fiduciary in all cases, and they will not receive any hidden commissions or hidden fees throughout the relationship. This safety tip is for your protection. A true fiduciary will gladly sign this statement.

Think you should hire a Fiduciary Financial Advisor with retirement planning expertise? Fill out the “Request Consultation” form, call us at 267-427-5667, or email kyle.rolek@rolekretirement.com