Are you in search of a reliable financial advisor to let your decision-making capability improve? Look into the market and there are hundreds of private advisors available to offer you service. But how reliable are they to approach?
If you are a regular follower of David Justin Urbas blogs, you would probably know that registered investment advisors (RIA) are only available in minor percentages. According to State and Federal Law, only RIAs are marked as Fiduciary Standard professionals. You will also find a lot of self-proclaimed financial advisors who are not at all registered. They can be best described as broker-dealers. They are held to a very minor standard of diligence level on behalf of the clients they handle.
If you want to judge the Fiduciary Standard of the Financial Advisor being hired, the best way to do so is figure out how the professional is compensated.
The Financial Industry primarily revolves around 2 major payment structures
Fee-Only Compensation
This structure basically minimizes any interest conflicts. In this process, clients are directly charged by the Financial Advisor for the services being offered. There are no other kinds of financial rewards included in this process. Everything is money-centric. Any Financial Advisor with Fee-Only Compensation facility deals with only one thing: selling their knowledge.
Fee-Based Compensation
Although this process sounds similar to Fee-Only compensation, but there is a stark dissimilarity. In this process, Financial Advisors would be paid not only his/her fee but also a part of commission or some kind of discounts from the client’s business services. This format is often considered a confusing one.
David Justin Urbas mentions that there is also a certain category of Financial Advisors who don’t come with any specific fee structure for their services. Rather, they are paid compensations through commission being earned through business transaction.
If you are a regular follower of David Justin Urbas blogs, you would probably know that registered investment advisors (RIA) are only available in minor percentages. According to State and Federal Law, only RIAs are marked as Fiduciary Standard professionals. You will also find a lot of self-proclaimed financial advisors who are not at all registered. They can be best described as broker-dealers. They are held to a very minor standard of diligence level on behalf of the clients they handle.
If you want to judge the Fiduciary Standard of the Financial Advisor being hired, the best way to do so is figure out how the professional is compensated.
The Financial Industry primarily revolves around 2 major payment structures
Fee-Only Compensation
This structure basically minimizes any interest conflicts. In this process, clients are directly charged by the Financial Advisor for the services being offered. There are no other kinds of financial rewards included in this process. Everything is money-centric. Any Financial Advisor with Fee-Only Compensation facility deals with only one thing: selling their knowledge.
Fee-Based Compensation
Although this process sounds similar to Fee-Only compensation, but there is a stark dissimilarity. In this process, Financial Advisors would be paid not only his/her fee but also a part of commission or some kind of discounts from the client’s business services. This format is often considered a confusing one.
David Justin Urbas mentions that there is also a certain category of Financial Advisors who don’t come with any specific fee structure for their services. Rather, they are paid compensations through commission being earned through business transaction.
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