Those who sell financial products. These salespeople are obligated to place the interests of their employer first and ahead of the interests of their clients. This arrangement incentivizes these representatives to recommend investments that pay the highest commissions. This means more money for them and less for you and presents a clear conflict.
Those who are Registered Investment Advisors (RIAs). RIAs registered with the Securities and Exchange Commission (SEC) or comparable state regulators, like Sentry Financial Planning are fiduciaries and are legally obligated to place your interests first. The fiduciary’s interests and the client’s are aligned to produce unbiased recommendations in the client’s best interests.
To side-step the harsh light cast on the abuses of commissioned sales representatives, the financial services industry came up with a new moniker called Fee-Based. This means the advisor receives fees from both the client and the financial institution whose products they represent. While it may be lucrative for the salesperson, it does little to protect the client from the problems of a pure commission structure.
When assessing a potential advisor’s loyalties, simply ask these questions:
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