Why Independence is Important for Investors
Insight Wealth Management, Inc. (IWM) is an independent, fee-only, fiduciary investment manager. We receive no commissions, referral fees or any other sort of compensation other than the fees our clients pay us. This standing allows us to recommend objective, low-expense investment choices to our clients free from pressure to push mutual funds, annuities or any other high-cost financial products. We do not use “soft dollars” or base investment decisions on sell-side brokerage research. We are compensated only by fees (not commissions) paid by our clients. We provide clients with detailed invoices showing precisely how much we have charged them. In this way, we can always act with integrity and in our clients’ best interests with no conflicts of interest.
Beware of firms calling themselves, "fee-based" or other confusingly misleading terms. "Fee-based" means the firm may charge fees for some of their services but they still use commission-based sales as well. Only fee-only advisors avoid the inherent conflict of interest that arises when an advisor profits from the client taking the advice they give.
An analogy of “fee-based” would be a doctor who charges a fee to examine you and then gets a commission for the medication they prescribe. The incentive would be to prescribe the medication from the pharmaceutical company that pays the highest commission. There is no such arrangement in the medical profession and there should not be one. However, the financial services industry allows for such conflicts to exist.
A fiduciary advisor has a legal responsibilty always to act in the client's best interest, even if the advise given is not the alternative that makes the most money for the advisor.
IWM is a member of the Schwab Advisor Services™ network of advisors. As an independent Registered Investment Advisor we can legally offer clients a wide range of investment management and financial planning services, but cannot have custody of clients’ assets or act as brokers. Schwab Advisor Services™ is our custodian and broker. This relationship allows IWM to offer clients Schwab's outstanding brokerage and custodial services, and other exclusive services Schwab provides only to investors working with the independent advisors in that network. IWM receives no compensation from Schwab. Schwab has no "strategic partners," preferred fund families, or any other practices that interfere with advisors' ability to offer completely unbiased and objective advice that serves clients' best interests.
IWM is not, nor is anyone associated with IWM, a registered representative of Schwab or any other firm. Schwab benefits from the commissions it earns when IWM implements investment decisions in client portfolios. IWM receives no share of those commissions.
Insight Wealth Management, Inc. is a small business, and an independent corporation registered in the Commonwealth of Virginia. Some advisors claim to be independent but are actually registered representatives of other firms. Their compensation depends on arrangements made with those other firms, thus impairing their ability to act as independent fiduciaries on behalf of their clients. They may operate under a business name of their own creation but they are not truly independent.
How can prospective clients know who is and who isn’t genuinely independent? Check the database at the Securities and Exchange Commission. This resource allows consumers to check the status of all advisors, advisor firms, brokers and brokerage firms. Their government-managed, objective database informs consumers if the advisor and their firm are indeed independent, or acting as a representative of another firm, even if they are using a different name and claiming to be independent.