Trust & Transparency: Why Hire a Chicago Fee-Only Financial Advisor

One phrase should stand out when you think about managing your money:  trust and transparency. Trust and transparency are twin cornerstones in wealth management, particularly if you intend to outsource your planning and investment needs to a Chicago-based, fee-only wealth management firm. 

You undoubtedly have unique financial planning requirements as a high-income earner and/or a high-net-worth individual. You’ve worked hard to achieve your personal and financial success, so finding the right financial professional is critical for achieving your continued journey that includes accumulating, preserving, and distributing your wealth to future generations.  

You have earned the right to a custom solution, not just a one-size-fits-all financial plan or investment management service. You deserve a fee-only, fiduciary financial advisor in Chicago who is required to make your financial well-being their number one priority. 

With that introduction, let’s explore why selecting a fee-only financial advisor in Chicago is in your best interests. 

How Cogent Conversations Can Help Design | Build | Protect Your Wealth.

Fiduciary Responsibility

Financial advisors, especially RIAs (Registered Investment Advisors) and IARs (Investment Advisor Representatives), are governed by the industry’s fiduciary standard. This is the industry’s highest ethical standard for financial advisors. This is not an option. It is a requirement of their RIA and IAR registrations. As your wealth grows and your needs become more complex, working with a financial fiduciary becomes more important because you have more to lose.

As a fiduciary financial advisor in Chicago, we are ethically bound to always act in your best interest, ensuring our advice and services are free of potential conflicts that can potentially undermine the pursuit of your financial goals. 

As a fiduciary, we not only personally pledge to put your needs first at all times but also embrace our legal obligation to do so. 

This unbiased approach can give you confidence, knowing your financial future is being handled by experienced professionals you can trust. We’re fee-only advisors who are dedicated and even obsessed with helping our clients realize their life and wealth goals. No brokers. No commissions. Just sound advice with your best interests at heart. Whether accumulating, preserving, or creating a distribution plan, partnering with a fiduciary ensures personalized, transparent, and dedicated advice every step of the way.

Long-Term Relationships

Wealth management is about more than quick and easy wins. It’s about nurturing long-term relationships between you and a team of ethical financial advisors. Trust ensures you are the beneficiary of high-quality advice you can trust. This facilitates the development of a long-term relationship that is based on trust and meeting expectations. You are more likely to retain this relationship with a wealth manager that is transparent and trustworthy. You don’t have to ask the right questions and record their responses.

Consistency in this relationship builds trust and rapport, providing more effective communication and smoother financial information and advice exchanges. On the other hand, frequent regular changes of advisors can lead to unnecessary expenses and increased risk exposure, not to mention the frustrating experience of starting over because each new advisor will need information that impacts their recommendations and services. 

Your success is a team effort. Finding the right advisor is important. But we want to be perfectly clear — when you partner with Cogent, you gain the strength and commitment of our entire organization.

Complex Financial Products 

Wall Street has done a good job developing complex financial products that can be used to manage your wealth. Understanding the complexities of hundreds or thousands of investment vehicles and their associated strategies can be challenging for those who cannot spend 100% of their time managing their assets.  

This is where the knowledge of a fiduciary fee-only financial advisor in Chicago can help. When it comes to growing and protecting your wealth, we prefer decades of peer-reviewed research over simple intuition or gut. We trust you’d agree. With our strategic and scientific approach to investing and financial planning, there’s little room for guesswork as we continue to craft and seek to optimize your financial strategy. 

The strategies in your investment plan are risk-optimized, cost-effective and tax-efficient to

enhance your odds of living the life you’ve imagined.

A highly skilled financial professional should be skilled in investment research and portfolio management. In particular when they are part of a team of professionals.  

Emotional Nature of Money

Money isn’t just dollars and cents; it’s tied to emotions, dreams, and security and is the foundation for the achievement of multiple goals. It is also the result of decades of work and has to last decades longer after retirement. Due to the sheer importance of the topic, it is not uncommon for our emotions to drive a lot of our financial decisions. This is a major source of hidden risk when emotions cause us to make the wrong decisions.  

A skilled fee-only financial advisor can act as a source of discipline and prudence that provides objective guidance and insights that produce far better decisions than those impacted by emotion. Your partnership with a wealth manager should be based on a balanced perspective that produces the right decisions, even when the securities markets are volatile.

Regulatory Compliance

Because financial services is a regulated industry, some advisors are required to be more transparent about their practices, fees, and potential conflicts of interest. However, these rules only apply as stringently to one type of financial advisor – the fiduciary advisor who works in a fee-only model. 

When you seek the assistance of a fee-only financial advisor in Chicago, you’re entrusting your hard-earned wealth and financial future to this financial professional. 

Given the significance of this selection decision, it’s vital to understand and review the compliance record of any advisor you’re considering hiring. 

A compliance history can help you evaluate an advisor’s ethical background for the length of time the advisor has been marketing financial advice and services to individual investors. This extra step will help you select a financial advisor you can trust. When examining a financial advisor’s compliance record, there are several red flags to watch out for. 

1. Frequent customer complaints or disputes, mainly if they revolve around the same issues, could be an indicator of even bigger problems.

2. A history of sanctions or disciplinary actions taken by regulatory bodies, such as the SEC, FINRA, or State, is a glaring warning sign. It suggests the advisor might be a repeat offender, which is not what you want advising you on your future financial security.

3. While advisors may have some minor infractions, it’s essential to discern the nature and severity of these issues. A pattern of repeated violations or severe missteps should make any potential client pause and question their ethics. 

4. It also pays to ask about lawsuits, divorce, foreclosures, bankruptcies, etc. You are seeking stability, and these are not signs of a stable professional who wants to advise you on the investment of your money.

Remember, when it comes to safeguarding your financial future, due diligence is not just a choice; it’s an absolute necessity.

Understanding Financial Advisor Compensation

As you work with an investment advisor in Chicago, understanding how they are compensated is crucial, especially as your wealth increases. As your wealth grows, these fees can become increasingly significant. Opting for an advisor whose compensation model aligns with your best interests can ensure your wealth is managed efficiently, avoiding excess expenses that reduce your invested assets.

There are three primary compensation models for financial advisors: Fee-only, commission-only, and both (fee or commission).

• Fee-only advisors typically charge a fixed fee that is a percentage of a client’s assets. From the start, your fiduciary, fee-only advisor will provide clear and transparent pricing information aligned with your unique scenario. Fee-only advisors price their services on various factors, including your personal financial situation and assets managed; at each incremental breakpoint, you pay less on the dollar. Their fee goes up when your assets increase in value. Their fees go down when your assets decline in value. Fees are fully disclosed and easy to understand. 

• Commissions are earned when an advisor sells a financial product, like an insurance policy or mutual fund, to a third party. It can be an inherent conflict of interest when lower-quality products pay higher commissions to incentivize advisors to sell their products. 

• Both are a mix between the two. Some advisors charge fees to clients with larger asset amounts and receive commissions for sales to clients with smaller asset amounts. 

Consider Cogent Strategic Wealth

We’re a different type of wealth management firm. Like you, we’re entrepreneurs at heart. Our team of experienced financial professionals takes great pride in our exceptional listening skills, which translate into customized strategies aligning with your values, goals, and financial concerns.  

We take our fiduciary duty seriously. We will always be fully transparent in everything we do for you, including no commissions and zero hidden fees.  

We believe in using science-based research rather than off-the-cuff investment selections, and we take a team approach when working with you. We serve as your financial advocate. 

Navigating your finances through each phase of life requires more than just a plan.

It requires a partner. 

The advisors at Cogent are with you through every step, acting as a trusted confidant and fearless guide—your first phone call when something happens. 

We would be honored to discuss your specific needs and goals if you’re considering a new partnership with a fee-only, fiduciary financial advisor in Chicago.

For informational and educational purposes only and should not be construed as specific investment, accounting, legal or tax advice. Cogent Strategic Wealth provides investment advice only through individualized interactions. Certain information is based upon third-party data, which may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio nor do indices represent results of actual trading. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this article. © 2023, Cogent Strategic Wealth®