When you accept professional advice on how to invest, save, and grow your hard-earned money, you have certain expectations from your financial advisor: expertise, professionalism, ethics, and independent, sound financial advice.
If you're not working with a Fee-Only Financial Advisor, you may not be getting what you bargained for. You can also choose the best financial advisor in Dubai from various online sources.
Many financial advisors are "Commission-based" which means their income is directly linked to the financial products and investments they sell you. Make no mistake, they are selling; these individuals may call themselves financial advisors, but they are really just financial salespeople.
Here's why: It is more lucrative to recommend certain investment products over others because of the commissions they earn. Therefore, it is very difficult for you, the client, to evaluate whether the "advisor's" particular investment recommendation is most appropriate for your portfolio, or if it's most financially lucrative for the consultant himself.
By contrast, Fee-Only financial advisors do not sell any products nor earn commissions; their only source of income is from their clients. Therefore, clients understand that Fee-Only Advisor works only for their clients' best interest, and are not wed to any investment company, product, or even insurance company.
As a result, advice is unbiased and independent, with no conflicts of interest – they are free to recommend investments and products that are in the best interest of the client rather than the company's bottom line. It's important to determine whom your financial advisor is really working for: you or the company whose products are being recommended?
In recent years, the term Fee-Based was introduced by the large investment firms in response to the growing demand for Fee-Only. Buyer beware: Fee-Based is not the same as Fee-Only. Fee-Based financial advisors can collect both fees and commissions, and they may also be incentivized to recommend certain products endorsed by their sponsoring firms.
A fiduciary is a financial professional who is held out in trust, and is legally obligated to put their clients' interests above their own. Fee-Only financial advisors are the only financial consultants who operate under a fiduciary standard; transaction based financial consultants operate under what is known as a suitability standard, which is a much looser standard.
In addition, Fee-Only financial advisors are highly regulated by either State or Federal regulators. If your financial advisor is unwilling to sign a fiduciary oath committing to put your interests above his/her own, then it's time to work with someone who is Fee-Only.