WHY SHOULD YOU CHOOSE AN INDEPENDENT FINANCIAL ADVISOR?

Independent financial advisors or independent advisory firms are actively involved in helping their clients. Hence, when you engage with them, you are more likely to forge deep, personal relationships. The advisor will potentially hold a strong sense of accountability towards you. Moreover, if your financial needs are complex and if you prefer personalized advice, it is recommended that you engage with an independent advisor. 

Here are some of the benefits that highlight the importance of working with an independent financial advisor: 

Independent advisors are not linked to any organization, investment products, or funds. So, the guidance they provide is solely driven to provide you maximum benefits. Be it in terms of your retirement planning, investment portfolio, or asset management, independent advisors have a wider choice, more flexibility, and offer their advice based on what is best for you without being influenced by external factors.

Your independent advisor will likely have a more personalized relationship with you as compared to a non-independent advisor. This enables the advisor to offer customized counsel closely aligned with your financial goals. The independent advisor will aim to build a strong understanding of your financial situation. Hence, they effectively engage with you to build deeper relationships. Independent advisors hold regular, ongoing interactions with you. They are attentive to your needs and are more responsive in offering their services. In most cases, since independent advisors are entrepreneurial business owners, they hold themselves personally accountable for your financial services.

Most independent advisors charge you as per a fee-based method. Under this method, advisors levy their fees as a specific percentage (usually between 1% and 2%) of the assets under management (AUM). Assets under management refer to the present market value of the assets/investments that the advisor directly manages and invests on your behalf. Independent advisors specify their terms and fees before the engagement begins. They also clearly disclose how AUM will be calculated under different circumstances and how the fee will change over the years. In an annual asset-based model, independent advisors often reduce their charges as the value of your assets increases over time. In some cases, these professionals set a benchmark that lists the change in AUM fee percentage if an asset-value goal is attained. Independent advisors are not associated with any financial products or large corporations, which means they earn directly from you and do not rely on commissions or referral fees from the sale of financial products. This means that your advisor has an incentive to help you grow your assets and wealth. If you prosper, your advisor also prospers. Moreover, because these advisors cannot use your assets and investments to benefit another client, the element of trust is higher. Further, independent financial advisors disclose all possible areas of conflict at the start of the engagement to ensure transparency and minimize any chances of discord in the future.

An independent advisor directly manages your assets and related wealth matters. However, your assets are safely and securely held in your name by a third-party custodian. This means that your money is not held by the same person who advises you on how to invest it. This creates a more reassuring system of financial checks and balances. Your monthly statements are directly sent by the third-party custodian. Moreover, even though your primary relationship is with the independent financial advisor, you have direct and constant access to all your financial accounts and asset management data through the third-party custodian.