Is Your Advisor Working For You? Or For Them?
When working with a financial advisor, you’re trusting them to help plan for your life’s biggest transitions. To ensure you are in good hands, it’s important to understand the differences among advisors.
Here are a few frequently asked questions:
Is my advisor a fiduciary?
Fiduciary is a buzzword frequently seen to describe certain financial advisors and unless you practice law, or work in financial services, you likely aren’t too familiar with the term.
Financial advisors who are fiduciaries are legally obligated to put their client’s interests first, ahead of their own. True fiduciary advisors are transparent on their fees and don’t earn commissions from the sale of financial products.
Many financial advisors who work for big brokerage firms are generally not fiduciaries. These advisors are held to a lesser standard called the suitability standard, meaning they must offer advice and product recommendations on what is suitable for you. Oftentimes this entails selling you products with higher fees to offer the advisor a larger commission.
As a CERTIFIED FINANCIAL PLANNER™ professional and Registered Investment Advisor, Grey Capital Management, LLC is bound by the fiduciary standard and must act in the best interest of our clients at all times.
How does my advisor get paid?
Understanding how your advisor is compensated helps you determine whether or not your best interest is first and foremost. Advisors typically get paid in three different ways:
Commission Based. These advisors earn all or part of their compensation via commission and may be required to favor products offered by their employer. These products may or may not be in your best interest.
Fee-Based. Advisors that are fee-based get paid by the client but also receive income from other sources, such as product and referral commissions. Typically these advisors work for a broker-dealer and are required to sell products that are “suitable” for their clients.
Fee-Only. A fee-only advisor is paid directly by clients for their services via a flat fee, hourly rate, or a percentage of assets under management. These advisors cannot receive commissions.
At Grey Capital Management, LLC, we operate as a fee-only fiduciary advisor. Our focus is to work collaboratively with you to find the best solutions that align with your financial goals.
Selecting the right financial advisor is crucial. By understanding the differences among advisors and their compensation structures, you can make informed choices that prioritize your financial well-being. At Grey Capital Management, LLC, we uphold the fiduciary standard as fee-only advisors, committed to acting in your best interest. Let us help you find the optimal financial solutions tailored to your unique needs.
