I recently participated in a focus group of financial advisors. About half of the participants were Fee-Only advisors who have a fiduciary relationship with their clients, and the other half were independent brokers. The “independent” in this case meant that they were not representing a large broker/dealer like Merrill Lynch or Smith Barney.
These brokers were Fee-Based, which means they charged a fee but still received commissions based on the products they sold.
A telling difference between the Fee-Only advisors and the brokers came when the moderator asked what type of “rewards” would you like to receive in exchange for doing business with a mutual fund company. The Fee-Only advisors replied either “nothing” or “more detailed information on the company’s web site” The brokers preferred to receive merchandise: golf shirts, hats, etc.
To me this clearly shows who will work in your best interest and who may not. For more information on fiduciary advisors go to www.focusonfiduciary.com