Fiduciary. Fee-Only. Independent. Here is what is important when selecting an Investment Advisor
The Fee-Only network (Of which Hylland Capital is a member), put out a great short video that explains a little bit more about terminology that is thrown around a lot. But what do those terms really mean?
A fee-only advisor gets paid ONLY by the client. That means fee-only advisors do not earn commissions from selling mutual funds, annuities, or other insurance products. This ensures that we select the best investment for YOU, not the investment that best lines OUR pockets.
That salesman who hides behind the 'financial advisor' title but is selling whole life insurance gets paid a huge commission (as high as 75% of your first years premium!!) for getting you to buy a policy. A fee-only advisor like Hylland Capital Management does not make a dime on commissions when we recommend a specific investment or insurance option.
Who do you think will make the best decision for you?
A Fee-Only advisor is not a salesman. In fact, for those who charge a fee based on your assets under management (AUM fee) like Hylland Capital Management, the only way we increase our pay is to increase the value of your account. We are on your side, those insurance salesmen are not.
A fiduciary is an advisor who is obligated to consider your best interest only. That means when making a financial decision, we have to consider how the decision affects you, and ONLY YOU. We can not base a recommendation based on how we would be compensated.
As an example, let's look at a company whose "advisors" are not fiduciaries - Northwestern Mutual. When you visit their office, you will be sold a whole life policy, even if it is not the best course of action for you.
Whereas visit Hylland Capital, and if we determine that you need additional insurance, we will help find the best policy for you. (It will probably be a term policy compared to a high fee whole life policy, by the way!)
Besides being a salesman, the fiduciary standard means that when making personal financial decisions, we look beyond our assets under management. For example, many people struggle with debt. Whether it is student loan debt, credit card debt, or other forms. Financial advice from a fiduciary may include recommendations on paying down that debt (benefiting you), instead of saving additional money (benefiting us), or buying insurance (benefiting them).
Independent means that we are not constrained to buying specific investments, or remain loyal to specific brands or companies.
For example, walk into an Edward Jones office and you will very likely be directed into American Funds, a mutual fund company that pays Edward Jones "advisors" high rewards for investing client assets in their funds. These mutual funds cost investors a ton of money in high fees...but Edward Jones doesn't care because they want a paycheck.
As an independent advisor, we can invest assets wherever provides the best deal to our clients. We may use a Vanguard ETF for bond exposure, a Schwab mutual fund for stock exposure, and a Fidelity fund for money market exposure. We can be flexible, and use the competitive nature of the industry to our advantage to save our clients money.
Finding a Financial Advisor for You
We know finding a financial advisor can be stressful. Knowing that we are members of the Fee-Only Network, NAPFA, and the XY Planning Network helps you know that we have your best interests at heart.
But don't just take our word for it, here is what others say:
Best of all, we offer free first meetings to anyone. You have nothing to lose, talk to us today to see how we can help you!