While there are lots of good questions to ask an advisor or investment professional, there is one question that must be asked first, as all other questions should be based on the answer to this one question.

Are you a fiduciary?


If the answer is yes, then you are most likely in good hands. You are also part of an exclusive group, as only 15% of financial professionals are fiduciaries. For most of you though, the answer your advisor, broker, or financial planner will give is you no, so proceed at your own risk. (Our advice would be not to proceed at all.) You see, advisors who act as your fiduciary take on one of the most important duties under the law, which is to act in your best interest at all times. In other words, advisors who work as your Fiduciary have a duty to act as you would for yourself, if you were an expert in the field of finance. All of the advice they give and conversations that they have with you are governed by this duty. Advisors who are willing to accept such a duty essentially become your financial guardian, taking on all of the responsibility for your financial well being. All other advisors, brokers, investors, and financial planners that are not fiduciaries, don’t legally have to do what’s in your best interest. Instead, their job is offer you financial products and services, forcing you to make the final decisions so that they don’t have to be legally held accountable for their advice. (This is known as the suitability standard.) We don’t know about you, but that is not the type of advisor that we would want to entrust our financial lives to.

James Di Virgilio

Author James Di Virgilio

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