You’ve probably read a dozen articles that tell you how to tell a good financial planner from a salesperson or product-pusher, but the truth is, the salespeople and product pushers are so good at looking like the real thing that most articles fail to unmask the pretenders.  Not so a recent article by Liz Weston, columnist for NerdWallet, a very helpful financial website frequented most often by Generation X and Y consumers, that appeared in the Washington Post.
Weston says that brokers and salespeople will allow their customers to believe that they are required to act in your best interests, when in fact they are actually held to a much lower standard of suitability.  If you need to invest, then it is “suitable” to recommend a high-commission annuity, non-traded REIT or other product which a real financial advisor, held to a higher fiduciary standard, would never consider recommending. Weston’s first piece of advice is: if your “advisor” recommends anything other than a portfolio of low-cost, high-integrity mutual funds or ETFs, run for the exits and remember to hang on to your wallet when you do. Also watch out for “proprietary” mutual funds; that is, funds managed by the employer of the “advisor” who is earnestly recommending them.
Weston also notes that some product salespeople claim that their services are free, or dirt cheap.You never see the commissions that they earn, or incentive payments or other sly under-the-table compensation which actually makes the relationship much more expensive than an honest advisor relationship.  Weston notes that advisors who don’t register with the Securities and Exchange Commission as registered investment advisors, and who don’t have the CPA or CFP designations after their names, should be presumed guilty until proven innocent.  Ask them if they’re willing to promise to act as a fiduciary in writing. The Committee for the Fiduciary Standard has created a fiduciary oath that advisors can download and sign.
The key message here is that conflicted advice can cost you considerable amounts of money.  Chances are, you already knew that. 
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice, and any opinions expressed are solely those of the writer.  Past returns do not guarantee future returns.