Not all financial advice is created equal. Investors must be aware of financial advisors' differences to protect their financial interests.

The fact of the matter is there are two types of financial advisors: 

• Some are legally bound to give fiduciary investment advice and suggest investment solutions that are genuinely in the best interests of their clients. 
• Some advisors are not bound by fiduciary standards. Instead, they can call themselves financial advisors and sell investment products for commissions. And, no regulation requires them to put investors’ financial interests ahead of their own. 

Who you choose as your financial advisor is one of the most important decisions you will ever make for yourself and your family. In our blog, we’ll look at why you should consider partnering with a fiduciary investment advisor.

Financial Advisor Licensing

We get it. Managing your money is complex and often confusing. It can be overwhelming between the technical jargon, licensing requirements, complicated investment products, and various financial advisor compensation models.

So, how can you quickly determine if an advisor is a fiduciary? Start by asking about their licensing.

Series 7 License:

A Series 7 license enables registered representatives to sell a broad range of investment products for commissions: Stocks, bonds, options, derivatives, and other investment products. 

This license means they've passed the General Securities Representative Exam, which covers industry regulations and basic information about various types of securities. This license does not require financial advisors to adhere to a fiduciary standard. 

If advisors only have Series 7 licenses, they are paid commissions by third parties (broker/dealer, mutual fund family) to sell you their products (securities, mutual funds, etc.). Many of these advisors may claim their advice and services are free because third parties pay them. However, the third parties increase their fees to cover the costs of commissions. 

Typically, little or no financial advice is provided after the sale because the financial advisor is paid to sell and not service what they sell. The one exception may be trailing commissions.

Watch our team discuss why 2024 may be a very different year for the stock market and economy.

Series 65 License:

The Series 65 is designed for individuals serving as investment advisers who charge a fee to clients for their advice and services. 

It covers laws, ethics, and various investment vehicles, ensuring advisors understand the industry's regulations. 

A fee is paid directly to the financial advisors from one of their clients’ accounts. The fee may be asset-based, fixed, hourly, or fixed/subscription. Types of fees may vary by financial advisor. Many of these professionals refer to themselves as fee-only fiduciary investment advisors. 

Top Six Benefits of Working with a Fiduciary Financial Advisor

Working with a fiduciary financial advisor offers several advantages, especially if you have accumulated substantial wealth and require ongoing advice and services.

• Fiduciary financial advisors must act in your best interests, prioritizing your financial goals and needs over their own. This requirement fosters trust and ensures transparency in your dealings with your financial advisor.
• Fiduciary advisors should tailor their financial advice and investment strategies to your unique financial situation, goals, and risk tolerance, providing a customized approach to financial planning and investment management.
• Since fiduciaries must avoid conflicts of interest and disclose potential conflicts in advance, you should receive unbiased advice designed to benefit you and not the financial advisor.
• Fiduciary financial advisors typically possess a broad knowledge base and expertise in various financial disciplines, such as retirement planning, tax minimization strategies, and investment management, thereby offering a holistic approach to the investment of your assets. 
• Fiduciaries should proactively manage your portfolio with regular reviews and fine-tuning to align it with your evolving financial goals and changing market conditions. They are also accountable for their actions and decisions, providing an added layer of security and confidence in their advice and services.
• Fiduciary investment advisors stand apart from the traditional sales-driven models based on selling products for commission. They are not in the business of creating transactions that push commissioned products. Instead, they provide ongoing, fiduciary advice based on pursuing their client's long-term financial goals. This long-term approach provides comprehensive financial plans that reflect your needs, concerns, and goals.

Why Partner with Global View Investment Advisors?

The truth is that Wall Street is infamous for its conflicts of interest. Big names in finance, like banks and insurance companies, often set sales targets for their advisors. Having been through a Wall Street firm’s training ourselves, we've seen it firsthand. That's precisely why we don't play that game. What’s best for the firm may not suit the client.

Many sales-oriented advisory firms get kickbacks for steering you toward proprietary investment products and the firms that pay the most significant commissions. This could mean they are selling the products that benefit them versus their clients.

Many of these firms are public companies, so their share prices benefit them when they sell investment products that generate more revenue and profit. This is the ultimate conflict of interest. 

And don’t forget their turnover rates. The more transactions they create, the more revenue they generate for their firms and shareholders.

An advisor with a license to sell insurance might push insurance products—not because they're what is suitable for you, but because that is all they can sell. This is similar to stockbrokers selling stocks because their licenses allow them to do that.

So, how is the advice you're getting genuinely for your benefit or just a way to boost the advisor's income?

The truth is, you might not. Your alternative Is to select a fee-only, fiduciary financial advisor.

Here's what you get when you select Global View Investment Advisors:

• We are financial fiduciaries
• We're committed to being 100% fee-only
• We won't sell you financial products that pay commissions
• Third parties do not pay us hidden commissions
• Our sole responsibility is to provide investment advice that serves your interests
• We are your independent financial advocate

Think of it this way. When you visit a doctor, you trust you're getting care from a certified, licensed professional whose sole responsibility is your physical well-being. It is the same at Global View, except our responsibility is your financial well-being. You do not expect your physician to be paid commissions to recommend the products of certain pharmaceutical companies. Unfortunately, we can't say the same for the financial service industry.

Being an independent Registered Investment Advisor, Global View is your financial fiduciary, always acting in your best interests and focusing on pursuing your long-term financial goals.

When choosing an advisor, accept no substitutes. Insist on a fee-only financial fiduciary!

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