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Independent Financial Advice
INDEPENDENT FINANCIAL ADVISORY
The independent financial advisor (legally referred to as Autonomous Financial Advisor, or CFA), is a professional who is remunerated exclusively by fee (Fee-Only) by their client and cannot, by law and professional ethics, receive any compensation from any issuer or intermediary, such as Banks, SGR, SIM, or Insurance Companies.
Does not carry out any sales activity, has no relationship with those who sell financial products; provides exclusively advice and assistance to clients for the proper planning of their assets.
Never touches the clients' money, which remains deposited in the client's trusted bank; the recommended transactions are carried out by the client themselves, supported by the independent professional.
They carry out in-depth analyses of existing investments and prepare the most suitable investment strategies to achieve the client's objectives, taking into account the correct level of risk and adequate protection of assets.
In summary, they are a professional free from the economic conflict of interest typical of traditional operators, who are tied to the bank or sales network (SIM) to which they belong, and must mediate the interests of the client with those of their employers.
THE CONFLICT OF INTEREST IN THE OFFERING OF FINANCIAL PRODUCTS
In the financial world, the sale of a product implies the transfer to the client of risks and commissions: the higher the level of risk transferred, the greater the commissions collected by those who created and placed the product.
For example, structured derivatives sold to companies, public administrations, and individuals have a higher commission content than that of an equity fund, which in turn is higher than that of a bond fund, which in turn is higher than that of a money market fund, and so on.
Investors, who often have difficulty understanding the products in their portfolio, are not fully aware of the risk inherent in their investments.
The Fee-Only advisor, thanks to the independence and competence that distinguish them, also assists the client in rebalancing the risks present in the investments that make up their assets.
Art. 5 - Ministerial Decree 24 December 2008, no. 206
(Independence requirements)
1. Persons who have, directly, indirectly or on behalf of third parties, financial, professional or other relationships, including family relationships, with issuers and intermediaries, with companies controlled by them, controlling them or subject to common control, with the shareholder or group of shareholders controlling such companies, or with directors or managers of such companies, if such relationships may affect the independence of judgment in the provision of investment advice, cannot be registered in the Register.
© Marco Galli 2019
Privacy Policy
Cookie Policy