A common misconception is that if one pays a financial adviser a fee to prepare a financial plan, or to provide investment recommendations, then, since the adviser has nothing to gain or lose personally from the advice, those recommendations will always be in the best interests of the investor.  In an ideal world this would be the case, but in reality, even fee based investment advisers often receive some type of compensation for recommending various investments, through one means or another, although the fact and amount of the compensation paid may be nearly impossible for the investor to discover.  A fee based investment adviser owes the highest degree of fiduciary duty to an investor, and under the law, any compensation paid resulting from investment recommendations must be fully disclosed.  Unfortunately, in a practical sense, this rule is frequently disregarded.  If a fee based adviser is paid some form of compensation for having recommended a particular security, the adviser has a conflict of interest that may result in unsuitable recommendations that cause financial harm.  Under the law, even a fee based financial adviser can be held liable for losses caused by unsuitable investment recommendations.

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