Think Twice Before Getting Financial Advice From Your Bank

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Before you pay a financial adviser to make decisions about your financial life, think twice. Bank financial advisers are professional salespeople who have limited options, and will try to push you towards their products even if there are better alternatives available. They should not be trusted with your money and you should always do your own research.

Do not pay for financial advice

It is important to check whether financial advice is provided at no cost or for a minimal fee. You should also ask whether your personal information will be kept confidential and if it is being used for marketing purposes. It is also important to ask about the different types of investments available and how much they will cost.

Ask if a financial advisor is a fiduciary

One of the first things to ask a financial advisor is whether or not they are a fiduciary. Fiduciaries are obligated to act in the best interest of their clients, and are protected by law against misconduct. This means that if your advisor acts against your best interests, you may be able to sue and recover funds you lost to them. If you suspect your advisor is not a fiduciary, ask them to prove it in writing. You can also look up their status in the SEC database.

If you have doubts about whether your financial advisor is a fiduciary, you can ask him or her to provide you with a Fiduciary Oath. A true fiduciary should not hesitate to provide this to you and should never refuse to sign it. You can also check whether your advisor is a member of a trade association, which represents financial advisors who are fiduciaries.

Financial advisors who are fiduciaries must put their clients’ best interests first and avoid conflict of interest. In general, a fiduciary is bound by law to recommend the best choice for you, and will not steer you toward investment products that increase his or her commission.

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