Personal Money, November issue (pg. 74) has a column by Edwin Morrow which discusses about independence(fee-based) financial advisers and those that are tied to a particular company. After reading it, I couldn’t agree more with his view on why there isn’t much difference in terms of “conflict-of-interest” between the two type of financial advisers.

Independent financial advisers often potray themselves as neutral, non-biased and “pure” when it comes to recommending products to their clients. Morrow points out that this is often not the case, as independent financial advisers, though do not take direct commission from the products that they recommend, but they do take a cut from their clients’ assets under management, which is similar to commision-based, and to claim that they are non-commission based would be fradulent.

In fact, the emphasize of “independence” advisers are often used as marketing advantage.

The competency of the financial adviser should be used as the number one benchmark when engaging a financial adviser to manage your family’s financial concerns. Afterall, it all boils down to the result that the financial adviser can produce; you are either gaining or losing out. It doesn’t really matter if the adviser is on a fee-based or direct commission-based.

The competency of the financial adviser can be evaluated through their experience, education and resourcefulness.

So the next time someone approaches you and tell you that they are fee-based and have no vested interest in any products, remember to check up on their “resume”. :-)