When you see a doctor, you know that they’ll be working to ensure that your health is the best that it can be. When you hire a lawyer, you know that he or she will be working tirelessly in your legal interests. But what about your financial adviser? Though there are more than 300,000 financial advisers in the United States, Freedom Debt Relief Reviews has found that less than 10% are “registered investment advisers,” which means that they are legally required to put your interests first when it comes to planning how to invest your money. Unlike when you choose a doctor or lawyer, you need to be very careful when deciding which financial adviser to hire because over 90% of them may be putting their own interests above yours- for example, trying to sell you more expensive stocks or CDs in order to garner a higher commission rather than less expensive choices that will make you more money. Freedom Debt Relief Reviews urges you to ask any potential financial advisers these questions before making the decision to hire.
“Are you a registered investment adviser?” If the financial adviser you’re considering is not a registered investment adviser, it means that he or she is simply a stock broker, and you should continue your search elsewhere. Brokers are legally allowed to put the financial interests of themselves and their employers above your own, and are often incentivized with bonuses and commissions to steer you towards specific investments; on the other hand, registered investment advisers are legally obligated to put your own financial interests first.
Even if you are speaking to a registered investment adviser, you need to also ensure that they are not also a broker. Freedom Debt Relief Reviews advises anyone searching for a financial adviser to ask both if they are a registered investment adviser and if they are a broker-dealer- you should be looking for someone who is legally required to be thinking about your financial interests first, but who is not associated with a specific set of investments (and thus, incentivized to steer you towards certain options).
“Do you receive any third-party compensation for recommending particular investments?” Even if your financial adviser is not receiving commission or bonuses by recommending specific stock and investments, you want to be sure that he or she is not receiving non-financial rewards like trips, cars, or extra vacation days for steering you towards certain investments that may not be best for your financial profile. Freedom Debt Relief Reviews recommends double-checking to make sure that the financial adviser you choose to help manage your money doesn’t have any interests in mind when advising you other than your own.
“Where will my money be held?” Freedom Debt Relief Reviews urges you to only work with financial advisers who hold your money in a third-party custodial account. This will secure your money and make sure that, should your financial adviser be hacked, you won’t lose all your money. You can sign over partial power of attorney to your financial adviser in order for them to manage your accounts without the power to withdraw any of your money. This also has two benefits that you can take advantage of should you need to fire your financial adviser. First, when you hire a new adviser, you won’t need to withdraw your investments to change accounts- your new adviser can simply take control over the third-party account. Second of all, because the limited power of attorney does not give your financial adviser the ability to withdraw money, you will avoid falling into a scam.
Just like you wouldn’t trust just anyone with the care of your home or the care of your children, you shouldn’t just trust anyone with the care of your financial future as well. Thoroughly researching all of your options when it comes to financial advisors is crucial to making sure that your money is going towards the investments that will make your the most amount of money- and not making your adviser the best commissions.