Building substantial wealth takes a major commitment on your part. It’s more than luck. Winning the lottery doesn’t count. This is why highly successful individuals and families utilize the services of a fiduciary financial advisor to help them pursue their vision for financial independence.
Think about how hard you’ve worked to build your wealth. Who you select to help you expand your wealth is one of the most important financial decisions you will ever make for yourself and your family.
You have several options when it comes to wealth management service providers. Some brand-name financial services firms want to sell you their investment products using a one-size-fits-all strategy. While there is nothing inherently wrong with this approach, a cookie-cutter solution may not be right for you and your family.
Conversely, independent financial advisory firms, like Cogent Strategic Wealth, provide highly customized, tailored wealth management solutions consistent with their responsibilities as financial fiduciaries. Cogent’s planning and investment services are tailored to your needs and built on evidence-based research, so you have a great experience and the highest probability of a successful outcome.
In this blog, we’ll look at ways you can vet financial professionals so you can make the right selection decision for your financial future.
Understanding the Fiduciary Standard
Fiduciaries hold a position of trust, representing the highest ethical standard in the financial services industry. Fiduciary investment advisors must prioritize your financial needs ahead of their own, providing objective advice and services that reflect your current circumstances, goals, and risk tolerance.
Any recommendation or decision they make concerning your ability to accumulate and preserve durable wealth should always be based on your best financial interests.
Fiduciary financial advisors can provide a full complement of wealth management services, including:
- Financial planning
- Retirement planning
- Tax planning
- Investment management
- Charitable giving strategies
- Legacy/estate planning
- Business owner/entrepreneur services
Cogent’s Advantage: When we started working with Wall Street firms ourselves years ago, we experienced the industry’s focus on meeting corporate objectives vs. client needs. We knew there had to be a better approach centered on pursuing our client’s aspirations.
Our approach is not one-size-fits-all. Far from it. We created our Design | Build | Protect process that helps us understand your current and future needs and any concerns you have about what’s next. From there, we create a tailored plan with documented timelines to help you feel comfortable meeting your key financial goals. Our comprehensive approach provides a solid foundation for handling life’s uncertainties while you stay focused on your long-term financial security.
DIY Investing vs. Collaborating with a St. George Fiduciary Financial Advisor
In the early stages of wealth building, many people manage their finances independently. This choice often stems from a desire for direct control, minimizing expenses, or the confidence they have in their financial knowledge.
As your wealth increases, your financial situation can often become more complex, involving tax considerations, estate planning, and other financial needs. This complexity can require the expertise of a financial professional with decades of planning and investment experience.
While managing your investments may give you more control, entrusting your wealth to an independent, fee-only financial advisor can help protect your financial future from unexpected risks.
Cogent’s Advantage: At the heart of our approach are Cogent Conversations, which offers a deeply personalized experience, focusing intently on your individual goals, dreams, and even blind spots. This is something that sets us apart from other wealth advisors.
Engaging in these conversations sets the foundation for a relationship based on mutual trust, transparency, and dedication to your financial prosperity. This approach gives you the knowledge and resources necessary to manage your wealth journey confidently and clearly.
Advisory Fees Matter to Your Bottom Line
You’d be surprised at how many people we meet who don’t understand how their financial advisor is compensated for their knowledge, advice, and services.
When selecting a financial professional who influences your financial future, understanding how a financial advisor is paid should be high on your priorities. It is all about trust.
A fully transparent relationship with your advisor fosters mutual respect, especially when you have accumulated significant wealth and your financial decisions substantially impact your well-being.
Never accept verbal communication from your advisor about how they are compensated. Fiduciaries must provide written documentation for all of the fees that will be fully disclosed, transparent, and deducted from your accounts.
Think about this: different compensation models can influence an advisor’s recommendations, accessibility, and results. Understanding these models helps ensure the advisor’s interests align with pursuing your financial goals.
- Commission Model: Advisors are paid commissions when they sell investment products. They are not paid to provide ongoing advice and services to investors. Also, this model can create potential conflicts of interest when advisors are paid bigger commissions for selling to larger dollar amounts or offering lower-quality investment products. In this model, you should know if the practitioner earns any compensation from third parties. Many do. Sometimes, money managers, insurance companies, wrap account sponsors, mutual fund companies, and others pay brokers and agents extra commissions for promoting their products over other, potentially better ones available.
- Fee-Based Model: Advisors are paid a combination of fees and commissions. Advisors charge a fee for advice and earn commissions to sell financial products. When the advice is considered secondary to a broker’s or agent’s primary, transactional-based duties, the advice must be suitable for you, but it’s allowable if it is influenced by underlying interests in promoting one product over another – even if the recommended product is not in your best interests. It is a challenge to know when an advisor is operating in your best interests or not.
- Fee-Only Model: Advisors are compensated solely through fees paid by the client, not commissions or kickbacks from third parties for selling their products. In the case of Cogent, we are operating as a fiduciary at all times. This model often aligns the advisor’s interests more closely with their clients.
Cogent’s Advantage: At Cogent Strategic Wealth, our mission is to offer you clear and reliable financial advice. As a fee-only investment advisor who is also an independent financial fiduciary, we protect your interests by charging a straightforward advisory fee on your assets’ current market value.
We’re committed to providing full transparency for our fees; we don’t hide any charges or earn any hidden commissions. Our independent status is also one of our key strengths. We are different from commission brokers or salespeople with potential conflicts of interest. We do not suffer from having a corporate entity over us demanding we put our clients in certain proprietary products or sell more. Our client-first approach mitigates the conflicts of interest and is not influenced by the requirements of large corporate owners.
We use an investment strategy grounded in more than 80 years of financial research and market data. Our evidence-based advice is tailored to your current situation, goals, and risk tolerance. At Cogent Strategic Wealth, we are committed to always putting our clients first.
Finding the Right Financial Advisor Near You
Choosing the right financial advisor is an important next step in managing your assets. This is especially true when the assets are being accumulated for retirement.
We strongly recommend asking these questions before making your final selection decision:
- How did they become financial experts (degrees, certifications, experience)?
- Who makes the investment decisions?
- Which firm has physical possession of your assets?
- Are they recognized as financial fiduciaries?
- How are they compensated, and by whom?
- Do they have any compliance or regulatory disclosures?
- Will they document important information?
Cogent’s Advantage: We’re excited to offer our services to clients nationwide. Our dedicated financial teams are in St. George, Utah, and Chicago, Illinois. We’re dedicated to helping you with your financial journey wherever you are located.