5 things your financial adviser isn’t telling you

1. Fees are my friend. New regulations currently being put in place will force advisers to disclose exactly how much you pay in fees on your mutual funds, but that doesn’t mean complete disclosure. “Fee-only planners don’t manage money so they’re approached all the time by investment advisers looking for a referral in return for a referral fee,” says certified financial planner Jason Heath. “These fees often aren’t disclosed.”

2. Great advisers specialize. It pays to pick an adviser who specializes in the area where you need help. For instance, if your marriage breaks down, you might want an adviser with a financial divorce specialist designation. Keep in mind that you’ll likely need more than one adviser in your lifetime—one for investment management and one for retirement and tax planning.

3. I don’t need to put your interests first. Advisers aren’t fiduciaries like lawyers. “It’s just a suitability standard that applies to their recommendations and conduct,” says Heath. That means any investment advice offered by an adviser can be rationalized as suitable for you. In fact, advisers are often offered monetary incentives to sell certain products, a situation that can result in a conflict of interest. There are some great advisers out there, but others are little more than commissioned salespeople who only sell the mutual funds offered by the bank they work for.

4. I may not be as competent as you think. You can become a qualified mutual fund salesperson after just one 30-hour self-study course and exam. You should demand at least a certified financial planner (CFP) or registered financial planner (RFP) designation. Both require far more rigorous certification and training.

5. Your financial future is not as predictable as I’m telling you. Their computer models sound real and concrete, but they can’t predict the future. You may lose your job or become critically ill, rendering your whole plan obsolete.