In fact, only “fiduciary” advisers are. So how do you know if your adviser is a fiduciary?  Ask him or her if they are an Investment Adviser.

Investopedia explains: “Investment advisers work directly for clients and must place clients’ interests ahead of their own, according to the Investment Advisers Act of 1940. Brokers, however, serve the broker-dealers they work for and must only believe that recommendations are suitable for clients.” READ THE INVESTOPEDIA ARTICLE ON FIDUCIARY ADVISORS HERE.

At JH Advisers, we’re Investment Advisors and/or Certified Financial Planners, both are fiduciaries.  Therefore, we are LEGALLY BOUND, as fiduciaries, to act in the best interest of our clients. 

We do not get paid more to select one investment over another.  We do not receive commissions (or loads) when selecting investments for our clients.  We are fee-only which means we get paid more if, and only if, your account value increases, so we’re on the same side of the table as our clients. Please note, we do receive commissions for insurance products (non-investment products).

On the contrary, an financial planner who is not a fiduciary, only needs to ensure that their recommendations are “suitable” for their clients. So for example, they could suggest an investment that gives them a higher commission or a product that doesn’t perform as well. And they don’t have to tell you about the better options.  Ask yourself, would you rather have what’s best for you, or what’s good enough?

Many of these “suitable” products and investments have higher fees than their competition.  The Department of Labor looked at the affects fees have on retirement savings accounts. This is how the DOL describes the current system exploited by non-fiduciary advisers: 

“A system where firms can benefit from backdoor payments and hidden fees often buried in fine print if they talk responsible Americans into buying bad retirement investments—with high costs and low returns—instead of

recommending quality investments isn’t fair.”