Simple question. As I understand it, A financial advisor who's a fiduciary has an ethical duty to make recommendations that are best for you, rather than their own financial benefit. Ergo, why would someone use an advisor who is not one?

That's it. Seems pretty straightforward to me.

I totally agree.

Initial cost?

I can imagine a non-fiduciary financial advisor charging a percentage based on transactions, rather than an upfront set fee.

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"Why would someone use a financial advisor who is not a fiduciary?"

Because they don't know any better*, and the non-fiduciary advisor is a good salesman.




*polite way saying stoopid moroon.
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They don’t know any better and the advisor pinky-swears the advice being given is in their best interests.

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Okay, thanks. That was my thinking. Seemed a bit too obvious, so I figured there was more to it that I just wasn't understanding.

Simple test -- An agent who wants you to invest immediately rather than pay down your debt first should set off alarm bells. That means they want their cut instead of giving you instant double-digit savings on credit card interest.

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Buzz
"Why would someone use a financial advisor who is not a fiduciary?"

Because they don't know any better*, and the non-fiduciary advisor is a good salesman.




*polite way saying stoopid moroon.
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This right here.

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It is what it is.

And who says that the advice is in your best interest and who certifies that an advisor is a fiduciary?

This 6 year old article that comes from a Berkshire Hathaway business publication has some interesting statements. (Unfortunately, the specific survey and methodology is no longer available.)

Apparently, 93% of people surveyed thought that financial advisors should put the interests of their clients first. (That's good...).

At the same time, 53% believed that all financial advisors already (back in 2017) had to put the interests of their clients first. (That's not so good...).

And 21% knew what the difference was between a fiduciary and non-fiduciary financial advisor. (That's really bad...).

And while 50% were certain that their financial advisor was a fiduciary, 38% did not know. (That's a real problem...).

I think we are beset by a largely uniformed populace. The 21% who knew the difference between a fiduciary and somebody who was not is pretty compelling.

[www.businesswire.com]

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Ombligo
Simple test -- An agent who wants you to invest immediately rather than pay down your debt first should set off alarm bells. That means they want their cut instead of giving you instant double-digit savings on credit card interest.

Unless your debts are at low interest rates

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most financial people are simply salespeople, where they can sell you anything "suitable"

and as you can imagine, the "suitable" investments are the ones that generate the most income.

for them.

Somewhat hidden commissions and fees are easier to swallow than an upfront % of your portfolio.

Then, there’s my wife. Both times she rolled over a 401(k), she got “advised” as to where to put the money. The first was all-out aggressive right before the dot com crash. The second was only 4-5% worse than index funds.

She has an unbelievable respect for authority figures.

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Embarassing myself on the Internet since 1978.

*polite way saying stoopid moroon.


That seems a little harsh.*


*Polite way of saying I think that's a dumbass overreaction.

You should have stopped at 'don't know any better'

One has to learn somewhere what the pitfalls are of fiduciary v. non-fiduciary.

Hell, they have to find out somewhere what a fiduciary is.

Lots of people are ignorant of various aspects and facets of finance.

Now assuming one knowledgeable and has the bona fides to convince someone they know what they're talking about, and they can do so as though they're talking to a six-yo, and that someone chooses to ignore them, maybe they are a stupid moron.



They don’t know any better and the advisor pinky-swears the advice being given is in their best interests.


This makes much more sense.



And who says that the advice is in your best interest and who certifies that an advisor is a fiduciary?


I must have missed the answer to this question.

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