Financial advisors in Minneapolis, MN help individual investors make financial planning and investment decisions. The goal is to help investors reach their financial goals and increase their net worth.
Investment consulting services are often provided by financial professionals that go by many different titles. Knowing which type of advisor will give you advice that is in your best interest can be very confusing. Some of the titles you might see are financial advisor, wealth manager, financial planner, or investment advisor. Anybody can claim these titles. But only one type of advisor can be called a Registered Investment Advisor (RIA).
Benefits of an RIA
Registered Investment Advisors are registered with the Securities and Exchange Commission (SEC) or a state regulatory agency if they have less than $100 million in assets under management. The rules for RIAs were formulated under the Investment Advisors Act of 1940. They must disclose their assets under management, their fee structure, and potential conflicts of interest. RIAs have a duty to provide investment advice that is always in the best interest of their clients. Financial advisors in Minneapolis MN that are RIAs, must always act with a fiduciary standard of care.
What Is Fee-Only Advice?
Many people assume that all financial advisors in Minneapolis, MN must act in the best interest of their clients, but this is not the case. For instance, broker-dealers are only required to act with a suitability standard. They do not have to disclose any conflicts of interest. They may earn a commission from the sale of financial products. Or they may fail to tell you about a more tax-efficient or less expensive option. RIAs cannot sell any products and get commissions; therefore, they do not have this conflict of interest. They are fee-only, which means they are only compensated by the client. They do not receive any compensation from other sources.
Choosing the right financial advisors in Minneapolis, MN can be a challenging process. Beginning the process with an independent, fee-only RIA is a good place to start.