Article - Independent Financial Advisors Vs. Investment Firms

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Independent Financial Advisors vs. Investment Firms
Choose the right path!

Independent financial advisors vs. investment firms. Why is there such a difference? How do you benefit by choosing one over the other?

Most importantly, how do you know you can trust your financial future with a smaller independent advisor? How do you know you can trust your money with a large investment firm?

These are all important questions to consider as you map out your investment plans to build a retirement portfolio. You need to know the people you’re counting on for prudent fiscal advice actually have your best interests at heart.

Investment firms are more focused on making sales

Unfortunately, too many financial firms and their employees are more focused on selling products than on providing advice and solving investor needs. This is a harsh reality that may blindside new investors. The bigger they are, the more money they want to make from you.

If you think about it, a large investment firm has a number of financial products affiliated with their organization. Advisors who work for those firms are incentivized to sell more of their own products. When they do, they earn higher margins for themselves and please their managers by keeping operating fees in-house.

Remember that you are the client. Your only focus is on building a healthy retirement portfolio. The agenda of a large investment firm is in direct competition with your needs.

Independent financial advisors are fiduciaries

On the other hand, independent financial advisors are fiduciaries, and are legally required to always put your interest ahead of their own. They must also disclose all necessary information, like fees and conflicts of interest. They even put it in writing in a disclosure document known as Form ADV, which they are legally required to provide.

That’s how you know you can trust an independent financial advisor. And remember that, when an independent advisor makes a recommendation, it’s because it’s in your best interest, not because they want to make a quick sale. This is what independent financial advisors do; they make considered recommendations in harmony with your goals and values with the intent of building a comfortable retirement portfolio.

You’re used to this difference already in other areas

If you remove the financial sector from the equation and look at the distinctions from another point of view, you can see the right path to follow for your interests.

It’s like the difference between getting medical advice from a doctor versus a pharmaceutical sales rep. A pharmaceutical sales representative can only recommend the medicines produced by their manufacturer. A doctor, on the other hand, is going to prescribe the medication that’s best for you irrespective of who manufactures it.

Customer service is also at the heart of the independent advisor’s business model. Independent advisors are driven by the desire to help you achieve your desired outcome. If you do well, they do well. They take time to build financial plans with you that map out a plan for your best life. It is a collaborative relationship. At large firms, the relationship is more transactional, impersonal, and profit driven, focused more on generating higher sales and profits for their firms.

What matters is what’s best for you

Should you work with an independent financial advisor or a large investment firm? The more important question to ask yourself is this one: who has your best interests at heart?

That’s the key to financial planning. You need to trust the expertise, the competence, and the motivation of who you are getting your advice from. Independent advisors care about the right solution to help solve your concerns and meet your needs. They are a guide on how to organize your financial life so that you can realistically achieve your goals; retirement, wealth transfer, tax management, and simplifying your life.

You deserve to feel comfortable, confident, and secure with the financial experts who manage your money. The relationship should be worry free, hassle free, organized, and in control.

To achieve that you need to know the difference between an advisor and a salesperson.

Get Help

Let us show you the fiduciary difference. Reach out today for a Second Opinion. You deserve to be sure you’ll have enough money for everything you need for as long as you live.

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