According to Thomas Stanley, author of The Millionaire Next Door, most millionaires take the advice of a CPA, attorney or other financial adviser. It makes sense. We’re too busy with our career or business to become an armchair expert in these subjects. So we farm it out. Or, at least, the millionaires do.
When you seek investment advice it’s very important to understand who you’re talking to. I recently had someone ask me if I was a CFP (Certified Financial Planner). And that’s a very good question. It showed that this investor was seeking qualified advice, not just a sales pitch. I applaud and appreciate that.
And no, I’m not a CFP. But I have the same fiduciary and ethical standards as a CFP because I’m a licensed financial advisor.
I know, I know. All of this is super-boring but its super-important. This small detail could mean the difference between you keeping your money or getting ripped off….If you’re taking advice from a product salesperson are your best interests top priority? Or is making a sales commission top priority?
In answer to that, let’s look at the definition of fiduciary duty: “A fiduciary duty is a legal duty to act solely in another party’s interests.” That’s from the Cornell Law School website (here’s the link: fiduciary duty).
A fiduciary financial advisor is obligated to act in your best interest. If there’s a choice between something that will benefit the advisor or the client, they must choose the client interest over their own.
So how do you make sure you don’t get ripped off? Choose a fiduciary financial advisor.