Ask an Advisor: Why Does Choosing a Fiduciary Financial Advisor Matter? Key Benefits & What to Look For

John Foligno, CMC®

John has nearly 30 years of professional work and coaching/mentoring experience, which includes over 10 years of running his own business. Through empathy, active listening, and thoughtful counsel, he lives his personal mission by inspiring people to overcome the roadblocks that prevent them from accomplishing their goals and helps them to find enlightenment, fulfillment, and financial well-being. He specializes in supporting business owners and professionals, although he enjoys working with all manner of people. John attended Syracuse University - Martin J. Whitman School of Management and earned a Bachelor's of Science, Finance, Marketing (double major), Economics (minor).

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Not All Financial Advisors Operate Under the Same Standards

The way a financial advisor is compensated can impact their recommendations—and ultimately, your financial future. There are three main compensation models:

Commission-Based: Advisors earn commissions on financial products they sell.
Fee-Based: A mix of fees and commissions, which can create conflicts of interest.
Fee-Only: Advisors are paid solely by their clients and do not receive commissions.

Commission-based and fee-based advisors may be incentivized to recommend certain products that generate higher commissions, even if they’re not the best fit for you. This inherent conflict of interest can make it difficult for them to prioritize your needs.

In contrast, fee-only, fiduciary financial advisors are legally required to act in their clients’ best interests – meaning their recommendations are based solely on what benefits you, not what earns them a commission.

What Sets a Fiduciary Financial Advisor Apart?

A fiduciary financial advisor should, at a minimum:

✅ Ask insightful questions and actively listen.
✅ Provide comprehensive financial planning beyond just investments.
✅ Keep in touch proactively and adjust strategies as needed.
✅ Offer creative solutions, such as the best way to claim Social Security.
✅ Stay informed on the latest tax laws and financial strategies.
✅ Review tax returns for potential savings opportunities.
✅ Understand your concerns and financial goals.
✅ Help you set priorities when facing competing financial needs.
✅ Develop a clear roadmap to achieve your goals.
✅ Collaborate with attorneys, CPAs, and other professionals.
✅ Have a clean record with no regulatory violations or complaints.

Why a Fee-Only, Fiduciary Financial Advisor Is the Best Choice

Choosing a fee-only, fiduciary financial advisor ensures:

✔ Highest Standard of Duty & Loyalty: They are legally bound to act in your best interests at all times.
✔ Fewer Conflicts of Interest: They do not earn commissions or accept incentives from third parties.
✔ Transparent Fee Structure: You’ll always know exactly how they are compensated.

A Holistic Approach to Financial Planning

What sets fiduciary financial advisors apart is their ability to go beyond investments and address all aspects of your financial life. At Grand Life Financial, we take a comprehensive approach, integrating your goals and values into every recommendation.

Financial Planning for Every Life Stage

Financial planning is an ongoing process that supports you through various life stages – not just major transitions like career changes or retirement. Whether you’re building wealth, managing risk, or preparing for the unexpected, a fiduciary financial advisor can help you stay on track.

Additionally, financial planning helps protect your family from uncertainties such as:

Market downturns
Emergency expenses
Long-term care costs
Outliving your retirement income

The Bottom Line

A fiduciary financial advisor provides objective, client-first advice that helps you build a secure financial future. By choosing a fee-only, fiduciary financial advisor, you gain a collaborative partner who is fully committed to your financial success – without hidden commissions and fewer conflicts of interest.

Have a Question to Ask a Financial Advisor?

When you’re uncertain about money matters, submit your question to Wealthtender, and it may be answered by a financial advisor in an upcoming article or in the Wealthtender Expert Answers Forum.

Need personalized help? Visit wealthtender.com to find the right financial advisor for your unique needs.

This article was originally published on Wealthtender and is intended for informational purposes only and should not be considered financial advice. You should consult a financial professional before making any major financial decisions. Wealthtender earns money from financial professionals, which creates a conflict of interest when these professionals are featured in articles over others. Read the Wealthtender editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.