Professional services in the realm of personal finance is plagued with conflicts of interest, little-to-no disclosures, financial gouging, lack of transparency and in some of the worse cases...out-rite fraud. There are also many professional advisers offering their services with their client's best interests in mind at all times. Its best to picture a spectrum ranging from high commission product salesmen on one end and fiduciary fee only advisers at the other end with everything in-between. Knowing how to find a trustworthy professional who will act in a truly fiduciary capacity on your behalf is an important consideration when hiring help in this area.
It is relatively easy for those who "know the terrain" to determine whether or not a prospective professional is right for their needs. For those who don't know, a list of important questions or a "checklist" should provide you with a guide in finding an adviser who will be working "for you" and to weed out the high commissioned "asset gatherers" who are merely trying to sell you something.
A financial adviser who is a fiduciary is legally-and ethically-obligated to always put you first. But how do you know who is a fiduciary?
What licenses, credentials and certifications do they have?
Certain licenses delineate what side of the table the professional is working from (you want them working on your side).
Salesman licenses (FINRA series 7, 6 and 63). These folks work across the table from you and have an inherent conflict of interest in the business model relationship between you and them. The inherent conflict of interest is that they have a personal incentive to put you in financial products with the highest payouts to them. These licenses allow the financial professional to sell to you financial products assessing commissions upon transaction closings. Where stocks and bonds used to be the prescription of choice many years ago when commissions and spreads on stock and bond trades were high, nowadays the products of choice are annuities, non-listed REITs, limited partnership interests in private equity or hedge funds and mutual funds with front-end loads.
How do you spot these folks? Just ask "do you have a series 7, 6, and 63"? If the answer is yes, then they can "sell you". If the answer is no then you need to find out how they make their money. The question you should also ask yourself is "do I want to be sold"?
Financial adviser licenses (FINRA series 65). These folks work on the same side of the table with you and may, or may not have inherent conflicts of interest in the business model relationship between you and them. These series 65 licensed professionals are paid either through fees on the amount of assets they manage for you or are paid through an annual retainer or an hourly rate for work provided on your behalf. When compensated on the amount of assets under management, the interest of the adviser is strongly aligned with the clients because the adviser will mke more money as his client's assets under management (AUM) grows.