The financial advisory industry has a well-documented conflict of interest problem: most advisors are compensated based on products sold or assets under management — creating incentives that may not align with your best interest. Here's how to navigate it.
When you genuinely need a financial advisor
- Complex tax situations: business ownership, equity compensation, significant capital gains
- Major life transitions: inheritance, divorce, death of spouse, retirement
- Estate planning beyond basic documents
- Net worth over $1–2 million with complex asset allocation needs
- Self-employed with complex retirement account decisions
When you probably don't need one
- W-2 employee with straightforward income and a 3-fund portfolio
- You're building toward first $100,000 — the mathematical benefit is small
- You're willing to spend 4–6 hours learning basic personal finance
The advisor types that matter
| Type | Compensation | Fiduciary? |
|---|---|---|
| Fee-only, hourly | Fixed hourly rate | Yes |
| Fee-only, AUM | % of assets (~1%/year) | Usually yes |
| Fee-based | Fees + commissions | Sometimes |
| Commission-based | Product sales commissions | Rarely |
How to find a fiduciary advisor
- NAPFA.org — National Association of Personal Financial Advisors (fee-only)
- Garrett Planning Network — hourly financial planners
- XY Planning Network — fee-only advisors serving Gen X and millennials
- Always ask: "Are you a fiduciary, and will you put that in writing?"
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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