Ways to Find if Your Financial Advisor is a Fiduciary

The perks of working with a fiduciary expert are easy to see. These advisors are have legal obligation to put their client’s financial interests at the highest priority, sometimes even above their own, and they have to reveal how they are going to get compensated, so that no potential conflicts of interest arise for the same. Having said that, not all certified financial planners in San Diego, California are required to be fiduciaries. Here are few tips to help you figure out whether the financial professional you are working with will meet your best interests and some one whom you can fully trust.

The most obvious and also the easiest way to figure out if your advisor is a fiduciary is simply to ask them about it. If the answer is no, then you must ask what is the reason behind it. He/she should be able to give you a clear, concise and logical explanation. They must also be more than willing to make you understand how they work with clients and what are the rules that apply to the advice they provide. Additionally, ask how the financial planner/advisor is compensated. If you find out that the answer is a complex structure, mark it as a red flag. Similarly, think more than once if the planner/advisor earns most of his/her money as investments commissions.

Next tip is to have a good idea on advisor designations. You may have observed that most of the financial advisors list abbreviations under their names. These letters talk about their professional designations, which can give you some useful information into the advisor’s fiduciary status. Listed below are some commonly used designations —

Certified Financial Professionals (CFPs) are recognized to a fiduciary standard set by by the Central Financial Planning Board of Standards. These fiduciary standards are applicable to wide range of financial planning, which includes tax, retirement, and insurance advice.

Chartered Financial Consultants (ChFCs) are recognized to a fiduciary standard set by the American College of Financial Services’ Code of Ethics. The ChFC takes into account similar core curriculum covered by the CFP along with some additional electives that mainly work on personal finance areas.

Accredited Investment Fiduciary (AIF) is provided by the Center for Fiduciary studies. It needs designees to not just be fiduciaries, but also prove their mettle with regards to fiduciary rules and actively take part in ongoing education.

Consider this article and make use of certified financial planner fiduciary services in your area.

Author Bio: The author is a blogger and the article is about fiduciary financial planning.

About This Author

Paul Jardine Joined: December 18th, 2019