Dear Liz: I am having difficulty finding a fiduciary, fee-only financial advisor. I have inherited considerable investments from my parents’ trust and now that their house is sold, there will be a payout in excess of $1 million. I believe that my parents’ money manager has done an excellent job of investing and managing their money, so I want to stay with him. My IRA is with another money manager. Without any personal recommendations, I do not know how to go about selecting a financial advisor from a list of advisors on the internet. Interviewing and selecting one based on likability makes me uneasy.
Answer: If anything makes you uneasy, it should be that an advisor isn’t required to look after your best interests.
A fiduciary is someone who is committed to putting their clients’ interests ahead of their own. Most financial professionals are not fiduciaries and are typically held to a lower “suitability” standard. That means they’re allowed to recommend investments that are more expensive or that perform worse than available alternatives, simply because the recommended investments pay the advisor more.
You can start your search for fiduciary, fee-only advisors by getting referrals from the National Assn. of Personal Financial Advisors, the Alliance of Comprehensive Planners, the XY Planning Network or the Garrett Planning Network. LetsMakeAPlan.org has a list of questions to ask.
Today’s top story: What Mastercard’s new Buy Now, Pay Later feature means for cardholders. Also in the news: How to find out if a destination is safe for travel, how the pandemic has changed the financial advice business, and how to get your credit card’s annual fee refunded.
Today’s top story: Financial advice that rarely fits all. Also in the news: Telehealth gets a boost among Medicare recipients in the pandemic, things to keep your holiday packages safe, and when you should transfer your credit card balance to a low-interest card.
Today’s top story: Here’s what bad financial advice can cost you. Also in the news: VA home loan limits disappear, fees rise, FAFSA and the military draft, and key questions to ask before buying that annuity.