The role of a financial advisor is to help their clients plan for short and long-term financial goals. By acting as a trusted resource, they guide their clients in making the right choices when it comes to investments, tax strategy, and planning for retirement. Yet, many financial advisors can’t truly call themselves fiduciaries. Unfortunately, financial advisors claiming to have their client’s best interests at heart while selling them unnecessary insurance and investment products are fairly common. To find a trustworthy financial advisor, individuals must first ensure the advisor is a fiduciary.
What is a Fiduciary?
The first step of finding a fiduciary financial advisor is understanding the difference between an advisor and a broker. A fiduciary advisor, like those Zoe Financial matches clients with, is an advisor that is legally required to work in their client’s best interest. According to Andres Garcia-Amaya, CEO of Zoe Financial, “When a financial advisor is a fiduciary, like a doctor taking an oath, they promise to act in your best interest. Because a fiduciary advisor is not selling clients an investment product, they can rest assured, knowing their advisor is there to provide sound financial advice. A fiduciary financial advisor is in search of the best outcome, providing holistic advice, while a non-fiduciary advisor focuses on one goal: to sell clients a product that’ll earn them the highest commission.” Not all advisors are fiduciaries, even if they claim to be.
A Registered Investment Advisor (RIA) is an example of a fiduciary advisor, as they are regulated by the Securities and Exchange Commission (SEC). Fiduciary advisors are required to:
- Act in the best interest of the client, which includes the advice provided.
- Respect a duty of undivided loyalty and utmost faith to the client.
- Never engage in activities that present conflicts of interest and fully disclose those that may do so.
- Never make misleading statements and fully and fairly disclose all material facts to clients and prospective clients.
- Not use client assets for personal benefit or the benefit of other clients without consent.
On the other hand, a broker may call themselves a financial advisor yet actually “self-regulate” through the Financial Industry Regulatory Commission (FINRA). This means that they only have to comply with suitability standards, meaning providing suitable advice instead of the best possible advice to their clients.
What’s worse, there are plenty of financial advisors who wear both hats by dually registering. Also known as hybrid advisors, dually registered advisors will tell clients they are working in the client’s best interest since they are RIAs, while really working for commissions for their respective broker-dealer. Loyalties can be hard to discern, as they may act as a salesperson and an advisor whenever it suits them. The question comes down to how an individual is most easily and safely able to find a true, trustworthy fiduciary advisor.
Where to Find a Truly Fiduciary Financial Advisor
Finding a truly fiduciary financial advisor can be tougher than finding a needle in a haystack. Zoe Financial’s diligent vetting process is focused on alleviating this precise headache for those seeking a trusted advisor. Andres Garcia-Amaya founded Zoe Financial after being an executive in Wall Street and discovering that behind the curtain, most advisors that claimed to be fiduciaries were actually pushing investment products on their clients.
Zoe Financial does the meticulous legwork of vetting advisors, so individuals are only matched with the best fiduciary advisors. By conducting a thorough review of the advisor’s credentials, education and experience, Zoe first ensures an advisor’s background makes for a high-quality advisor. Next, they dive into the advisor’s pricing and potential conflicts of interest. They ensure the advisor is fiduciary, unbiased, and transparent about their pricing. Truly fiduciary financial advisors will never receive kickbacks for recommending investment products. It’s a good idea to check the advisor’s status and conduct on the Securities and Exchange Commission website.
Any advisor who does not meet these requirements is not accepted into Zoe Financial’s curated network of fiduciary financial advisors. Zoe also takes it’s vetting process a step further by conducting both quantitative and qualitative assessments. It’s not enough for an advisor to be a fiduciary – in order for them to thoughtfully guide their clients, they must also be highly qualified in their process, knowledge, ability to problem solve, and operational efficiency. Additionally, a comprehensive qualitative assessment evaluates an advisor’s “bedside manner” regarding their communication skills and overall client experience.
The stringent due diligence process has been conducted on financial advisors across the United States, and only 5% of advisor applicants have been accepted into Zoe Financial’s advisor network. To find a truly fiduciary financial advisor without the headache, Zoe Financial is an investor’s best resource.
