Rich Habits Podcast

119: What Your Financial Advisor Won’t Tell You

22 snips
May 26, 2025
Discover the hidden truths financial advisors aren't sharing! Explore the crucial differences between suitability and fiduciary standards, and how small fees can dramatically affect your investment returns. Learn about various compensation models and determine if hiring a fiduciary is right for you. Get practical advice on personal finance, including managing college funds tax-efficiently and strategies for educational gifting. Gain insights into controlling your financial future while navigating debt and investment for long-term success!
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INSIGHT

Suitability vs Fiduciary Advisors

  • Financial advisors often operate under two main standards: suitability and fiduciary.
  • Only about 15-20% are fiduciaries, who must act in clients' best interests at all times.
ADVICE

Choose Fiduciary Over Suitability

  • Avoid advisors promoted by banks or brokerages pushing proprietary funds with high fees.
  • Always seek fiduciary advisors to avoid conflicts of interest and inflated commissions.
ADVICE

Understand Advisor Fee Structures

  • Understand financial advisors' fee structures: AUM percentages, commissions, and flat fees.
  • Know fees compound to significantly reduce long-term investment returns and ask if fees justify advisor's value.
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