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Why Fee-Only is Important~ or What Other Advisors Don’t Want You to Ask ~
In order to provide financial planning services, planners or their firms must be registered with either their state or the SEC as a Registered Investment Advisor (RIA). Because regulators want all financial planning advice to be objective, anyone claiming to be providing financial planning services must be registered as an RIA and is held to a Fiduciary Standard for those services.
This means that all of us are required to act solely in the best interest of our clients, even if that interest is in conflict with our own financial interest. RIAs must disclose any conflict of interest, or any potential conflict of interest, to our clients before and throughout a business engagement.
This includes making a full disclosure of all compensation received, both the amount and the source. This includes not only asset management fees or financial planning fees, but any form of commission, any “soft-dollar” arrangements, or any special incentives to recommend one product or service over another.
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