Business Insider: Questions to Find Out if Your Advisor Has Your Best Interest at Heart

Financial Planning

 Sara Gelsheimer By: Sara Gelsheimer

Sara Gelsheimer, Senior Wealth Manager out of our St. Louis office had the opportunity speak to Eric Roberge of Business Insider. Sara shared her insights on the conflict that exists for a client when their advisor is getting paid a commission. An excerpt can be found below, click the link below to read the article in it's entirety.

Ask how your adviser gets paid

Typically, advisers working under the suitability standard earn commissions or kickbacks when their clients buy certain products or invest their money in certain funds. 

"If you're working with someone who gets paid a commission, there are inevitably conflicts of interest at hand," says Sara Gelsheimer, CFP®, AIF® and wealth manager atPlancorp, LLC.

Gelsheimer provides this example to illustrate what those conflicts can look like:

Say an adviser gets paid $2,500 to sell you XYZ product (that has lower fees and is thus more likely to experience higher performance). But that same adviser could instead make $7,000 to sell you ABC product (with higher fees).

What do you think that adviser will do? 

"As much as I'd love to believe every adviser will naturally do what's in the best interest for their clients, I think it's hard for peoplenotto sell ABC product," she says. "It's much easier for an adviser to rationalize that ABC product is still reasonable for the client, so what's the harm?"

Thereareplenty of people in the world with strong moral compasses, and there are probably financial advisers out there who would recommend what was best for you even if it meant losing out on a bigger commission for themselves.

But as Gelsheimer points out, why even take the risk of putting yourself in that situation and hoping your adviser will choose time and time again to put your interests first at their own cost?

Instead, she suggests, work with an adviser who only gets paid by you and will work as your fiduciary 100% of the time. "That allows you to rest assured knowing they are doing what's best for you because their income isn't dependent upon what they sell you," she says.

Read the full article here.

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Sara came to Plancorp in 2013 with a strong financial background and an even stronger commitment to financial education—particularly for women. A Wealth Manager and Founder of InspireHer (Plancorp's Women's Initiative), Sara is also a new mom. More »

Disclosure

For informational purposes only; should not be used as investment tax, legal or accounting advice. Plancorp LLC is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC. All investing involves risk, including the loss of principal. Past performance does not guarantee future results. Plancorp's marketing material should not be construed by any existing or prospective client as a guarantee that they will experience a certain level of results if they engage our services, and may include lists or rankings published by magazines and other sources which are generally based exclusively on information prepared and submitted by the recognized advisor. Plancorp is a registered trademark of Plancorp LLC, registered in the U.S. Patent and Trademark Office.

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