Real investing news is rare. most of money media is devoted to business or speculating. we are always about 100% real investing. Let us know if you have any questions.

Finding an Advisor

Make sure you know your advisor before entering into this critical business relationship. One of the most critical questions to ask: “Are you required to act as a fiduciary?”

It is estimated that 85% of financial advice professionals are not required to act in the best interests of their clients, as Tara Siegel Bernard clearly illustrates in her October 10th New York Times article.

A non-fiduciary “advisor” is allowed to sell you anything that is merely suitable for you. A true fiduciary is required offer advice and products that are the best available (this is no guarantee that all will).

Given a choice between two, otherwise identical, mutual funds, a fiduciary would have to offer the cheaper of the two. A typical broker can sell you the fund that costs more (and makes them more money). They are not required to even mention the lower-cost alternatives.

This article illustrates that, to most firms, you are just a means to meet quotas and boost the next quarters results. To a few, rare advisors, you are an integral part of both their current and future business. These advisors understand that their livelihood ultimately depends on your long-term success.

The right advisor:

  • Never receives commissions
  • Charges annual fees of less than 1% per year.
  • Creates and manages portfolios based on your needs and risk aversion.
  • Relies on peer-reviewed academic investing research (therefore a good advisor:)
  • Uses no-load, passive investments
  • Provides ongoing support and guidance.

Read the NYTimes Article

Bad Alternatives

Video: Should You Use Alternatives?

0