GAINESVILLE, Fla., March 09, 2020 (GLOBE NEWSWIRE) -- Managing your wealth with commission-free trading apps has its appeal, especially when the markets are up, but what happens when there is trouble on Wall Street, or with the connection? The recent glitch on the popular Robinhood app during one of the markets’ wildest days has left do-it-yourself investors furious. James Di Virgilio, CIMA®, CFP®, a co-founder of Chacon Diaz & Di Virgilio, and one of the country’s leading fiduciary investors and financial planners says that while financial apps can be a great way to monitor spending habits and learn about the markets, hiring a fiduciary adviser is still the best way to ensure optimal financial planning and investment management results.
Planning for the future can be stressful, even more so if you’re not knowledgeable about the changing financial landscape or how to navigate a down market. Using apps can be risky if you don’t have the financial expertise of a seasoned fiduciary. However, choosing the wrong financial adviser can be just as risky.
“The Robinhood app is appealing because it is simple to use and cost-effective, but knowing what investments to select and what strategy to use is vital to get the results you want,” says Di Virgilio. “Hiring an expert financial adviser who always looks out for your best interests can give you the upper-hand in your investment strategy.”
Fiduciary is one of the most important words in wealth management, yet few people know what that means. Originating from the Latin word, fidere, which means to trust, Di Virgilio says a fiduciary must act in the best interests of their client at all times. In 2016, a new fiduciary rule was proposed but never implemented. Di Virgilio says this has left many Americans confused, believing that just about anyone in finance is a fiduciary, which is not the case.
“Shockingly, less than 15% of financial advisers and advisory firms are fiduciaries, yet the majority of Americans think that all financial advisers are fiduciaries,” says Di Virgilio, who has earned both the CIMA® and the CFP®, which only 1% of advisers hold in tandem. “For example, financial advisers who work at banks, brokerage, or insurance firms are not your fiduciary and are not required to do what is best for you, most of the time they are just salespeople.”
Di Virgilio recommends choosing a financial adviser who can prove that he or she is a full-time fiduciary and financial expert based on relevant education, experience and certifications. Ask if the financial adviser is a fiduciary all the time, in every circumstance for you. Some advisers and firms will act as a fiduciary for one area of wealth management, like financial planning, but not for investment management. In general, financial advisers who work for a bank, broker-dealers like Merrill Lynch, or insurance companies are never full-time fiduciaries. Check the firm’s website, and if there is a disclaimer on the page that reads: “Securities offered through XYZ Securities, Inc., Member FINRA/SIPC,” that means the financial adviser cannot be a fiduciary for you all the time. Firms that are fiduciaries will prominently display that fact on their websites and signage, and there won’t be any disclaimers. Fiduciaries must ensure that all advice is based upon best practices, or be in violation of fiduciary duty, which brings stiff legal penalties.
When selecting a financial planner, be sure he or she has a CFP®. When hiring an investment manager, be sure he or she has either the CFA® or CIMA®. Di Virgilio says choosing the right adviser will make a significant difference in your net worth and wealth management experience. For more tips on finding a fiduciary and for a list of financial advisers and firms who do not qualify as fiduciaries, visit https://cddwealth.com/what-is-a-fiduciary-and-why-should-it-matter-to-me/.