What your Financial Advisor DOESN’T Want You to Know

secretIn today’s economy, having a qualified financial advisor is important. Managing your way through the ebbs and flows and ups and downs of the markets is not for the faint of heart, and often not advisable without a competent and qualified guide, or advisor. With that in mind, most consumers hope that the information they receive from their financial advisor is accurate, up-to-date and above all trustworthy. We hope that is the case, however, sometimes “so-called” advisors, working for large brokerage firms, have big secrets that they don’t want you to know. So what are these secrets? Below is our list of five things your financial advisor does not want you to know.

How They are Paid
Most non-fee, brokerage firm based, advisors get paid on commission. This means that if they recommend a product to their client, they make money. The fact is, unless your advisor is fee-only, you cannot completely trust the advice they are giving, because everything you do affects the amount of money they make.

Hidden Costs
Advisors don’t want you to know that they have hidden costs with each recommendation they provide. One of the easiest ways for them to make money is to lead the investor to believe they have purchased a stock or financial product at the best price available. What the consumer does not know is that in addition to the actual cost of the product being sold, a profit for the firm is built into the sale price.

They Don’t Work For You
It is sad to say, but your advisor is not actually “your” advisor. While they are always there to offer suggestions and ideas, they are not employed by the consumer. At the end of the day, the job of a financial advisor is to make money for their brokerage firm. While it is always nice to have happy clients, the bottom line is if the firm is happy, everyone is happy.

How They Make Recommendations
Often, consumers are under the impression that their advisor has special “insider information” that gives them the credentials to offer investment advice. The fact is they don’t. Typically, the information that is given to clients is provided to the advisor from someone higher up in the organization. Sometimes these tips are excellent deals that can be of great benefit to the consumer. However, many times the advice is based on products that need to be pushed because of inventory or other factors that benefit the brokerage firm, but not always the consumer.

How Little They “Actually” Work
In general financial advisors make a lot of money, however, often there is a huge inequality between the large amount of money deposited into their bank account and the limited hours they actually spend acting in their client’s best interest. Unlike fee-only providers, the typical commission based advisor does not create a comprehensive plan for their clients, they simply sell them the best deal for that day and reap the benefits from their sale. Their plan is to sell what the brokerage firm recommends. The sad part of this equation is that without a well thought out plan for the future, they can make mistakes at the expense of their clients, but to the benefit of their employer.

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
This entry was posted in Uncategorized. Bookmark the permalink.

2 Responses to What your Financial Advisor DOESN’T Want You to Know

  1. Pingback: RelyLocal Wausau Newsletter for September 11, 2014 | Buy Local Wausau

  2. Chris says:

    Truth but not me

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s