Why do people seem to hate financial advisors?

It’s not easy being a financial advisor. Not only do these professionals have to manage their clients’ money, but they also have to market themselves to drum up business. And some financial advisors can be more aggressive than others in that regard.

In this Reddit post, a financial advisor asks why people seem to dislike folks with the advisor title. As the poster states, their goal in being a financial advisor is to help people.

The poster struggled financially at one point in time, and now, they want to make it possible for others to thrive. But they recognize that the nature of their job and how they get paid can lend to mistrust.

The reality is that some financial advisors are, in fact, pretty shady. But if you find the right one, you may find that working with them does you a world of good.

It’s important to vet your financial advisor

If you’ve ever had a bad experience with a financial advisor, then you may be inclined to never use one again. But before you resign yourself to that, ask yourself whether you’re willing to be open-minded.

Just as no two people are the same, no two financial advisors are the same. And if you’re able to find someone with great credentials who comes highly recommended, you may find that whatever fees you’re paying are more than worth it.

To that end, though, it’s important to understand exactly how your financial advisor makes money. There’s nothing wrong with these professionals getting paid, and they can’t be expected to work for free. But you should know how you’re paying.

A financial advisor typically either charges a fee that’s calculated as a percentage of assets under management, or an hourly rate. Some also charge flat fees or commissions only. It pays to decide which option you prefer and then find a financial advisor who bills that way.

The one big question you should always ask a financial advisor

There’s no reason to think poorly of financial advisors if you’ve never given one a chance, or if you worked with one person in the past who did not live up to your expectations. But before you hire a new one, ask each person you meet with whether they’re a fiduciary or not.

A fiduciary is required to put your best financial interests first at all times. If your advisor is not a fiduciary, they only have to hold by the suitability standard. This means they can suggest any investment as long as it’s suitable for you, but it doesn’t have to be the best or cheapest from a commission or fee standpoint.

A fiduciary must always recommend the most cost-efficient investments for you, even if it means less money for them. So that’s a distinction you don’t want to gloss over in your search for a professional to manage your money.

To be clear, though, even if you hire someone who’s a fiduciary, you still need to understand how they’re getting paid. Have any professional you’re talking to put their fees in writing so there are no unwanted surprises.

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