The difference between a financial adviser and a broker
Posted by: in Money Ripoffs and ScamsFiled under: Retire, Ripoffs and Scams, Wealth
According (subscription required) to the Wall Street Journal, “Ignorance might indeed be bliss, as investors typically don’t grasp the difference between brokers and financial advisers but are satisfied with the services they receive, a new study has found.”
A large part of the problem is that nearly no one calls himself a broker anymore — Everyone is a financial planner, financial advisor, retirement planner, whatever other euphemism they happen to select.
So what’s an investor to do? The key phrase to look for is “Fee only”. When hiring financial help, don’t even think about hiring anyone unless you see that phrase? Why? You want to hire someone to give you advice — not someone who is being paid on commission to sell you certain products, regardless of whether they’re appropriate.
To find a fee-only advisor, visit the website for the National Association of Personal Financial Advisors.
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