In the financial world, the sale of a product implies the transfer of risk to the customer and commissions: the higher the level of risk transferred, the higher the fees that are collected by those who created and who has placed the product.
Investors, who often have difficulty understanding the products found in your wallet, not fully aware of the risk inherent in investing.
The professionals and companies of independent financial advice, in fact, are remunerated exclusively by their customers, have no relationship with the company or product intermediaries and do not sell any financial instrument and therefore operate in total absence of conflicts of interest.
Their job is to recommend the most of their clients in estate planning and is solely intended maximum satisfaction of customer needs from which they are paid.
The conflict of interest has always existed, even if latently, since its origins in many forms of economic exchange and forms the basis of our economy have been created just to keep it under control. At the root of the conflict of interest there is always a strong imbalance in favor of one of the actors. This imbalance is due to the prevalence, beyond any standard, rule or practice, the interest of a person, and therefore to over-fulfillment of the legal situation of those who act in conflict than the conflict of who suffers it. Its most obvious consequence is the oppression which manifests itself in any contractual relationship, from the most basic to the most complex, whenever one of the parties is from a position of excessive force, and took the opportunity to impose its will on the other or when it has much more information on the object of the negotiation, and is able to hide them.
How to evaluate the presence of conflict of interest
Today described as “independent” in the world of financial advice has become more a matter of marketing than of principle.
So advice is effectively independent, it should be free from conflict of interest, and therefore focuses on the sale of a product but only to the substantial satisfaction of customer needs.
The factor that characterizes the independent financial advice is the remuneration. In fact, only if the financial advisor is paid solely by their client and not receiving rebates or commissions to any broker or company product, then his advice is not oriented to the sale and therefore is not affected by the conflict of interest.