This is what good financial advice looks like

By LIZ WESTON

NerdWallet

Good financial advice can help you achieve your life goals. Bad financial advice can cost you a fortune and leave you worse off than if you had tried to go it alone.

Unfortunately, you’re still on your own in trying to determine the good advice from the bad. The U.S. Department of Labor has delayed key portions of a fiduciary rule that would require financial advisers to put their retirement account clients’ interests first. The provisions are set to begin July 1, 2019, but it’s anyone’s guess if that will happen.

Many Americans believe, incorrectly, that their financial advisers already are required to act in their clients’ best interests. In reality, most are held to lower standards. Asking advisers to disclose their conflicts of interest is always a good idea, but here are some other ways to spot advice that truly puts clients first:

Good advice doesn’t promise the moon and stars. Beware of advisers who only want to talk about their investing prowess and how they plan to beat the market. Few advisers can consistently deliver market-beating returns and attempts to do so usually drive up their clients’ costs.

Good advice doesn’t promote “high-commission garbage.” That’s what financial journalist Bob Veres, publisher of Inside Information, a service for advisers, calls products that are notorious for high costs and potential to enrich advisers at the expense of their clients. These can include nontraded real-estate investment trusts, indexed annuities and variable annuities inside retirement accounts.

Proprietary mutual funds also can be problematic. These are the house-brand funds offered by the bank, brokerage or investment company where you have your account. Your adviser may earn extra compensation for pushing them, and they can have higher costs or worse performance than competing funds.

Good advice doesn’t pretend to be free or cheaper than it is. All investments have costs, and advisers can be paid in a variety of ways that may not be readily apparent to their customers. Financial advisers should be straightforward in explaining those costs and the ways they’re compensated.

Good advice comes from an adviser who puts clients first. Only a few categories of advisers are required to be fiduciaries or someone obligated to put their clients’ interests ahead of their own. Those advisers include registered investment advisers and certified financial planners when they’re offering financial-planning advice. Certified public accountants have a professional code of conduct similar to a fiduciary standard.