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Sometimes, travel involves more paperwork than just your passport and boarding pass. Travel visas are documents that grant you the privilege to travel to a given country. Depending on where you’re coming from, where you’re headed, and why, you may or may not need a visa to get there — but it’s important to find out whether you do as part of your travel planning.

If you need a visa, you’ll have to apply for one with the country you’re planning to visit. What’s more, the application will likely come with a fee.

To help you figure out the wide world of visa requirements, read on, and learn:

•   What the different types of travel visas are

•   Which travel destinations require a visa

•   How to get a visa

•   How long it takes to get a visa

Types of Travel Visas

While there are dozens of visas available for different purposes, they can be broken down into four categories: tourist, immigrant, student, and work.

•   Tourist visas are for travelers visiting a country for a short time. This is most likely what you’re looking for if you’re planning a vacation. Some countries don’t require United States citizens to apply for this type of visa ahead of time, but there may still be restrictions that apply to your travel.

For example, as long as you have a valid U.S. Passport, you can travel to most parts of Europe without applying for a visa beforehand. But you can only stay within the borders of the Schengen Zone for 90 out of 180 consecutive days. The passport stamp you receive on arrival is your visa. (The Schengen Zone encompasses most of the EU countries, some Scandinavian ones, and a few others.)

•   Immigrant visas are for people who are hoping to establish permanent residence in their destination country. Applying for this type of visa can be a lengthy, multi-step process, and getting a visa doesn’t guarantee you’ll be granted citizenship. Still, it’s an important first step toward emigrating to a different country.

•   Student visas are for those studying in a foreign country. To apply for one, you’ll need to prove that you’re enrolled in a legitimate, qualified school in the destination country.

•   Work visas allow their holders to accept employment in a country outside of their citizenship. These visas are usually temporary but can be renewed if the employment continues.

Many visas can be applied for online; these are known as e-visas. Increasingly, many countries are moving toward online visa applications. Exceptions are made for those who can’t apply online due to a disability or other extenuating circumstance.

Recommended: Guide to Saving Money on Hotels

How to Apply for a Travel Visa

If you are planning a trip and realize you need a travel visa, here’s how to spring into action. You’ll want to apply for it with your destination country’s government travel agency. During the application process, you’ll be asked to provide basic identifying information and, if applying online, you may be asked to upload a photo of your passport. The U.S. Department of State is a great resource for up-to-date information on which countries require a visa and how to apply for them.

Seems simple, right? It is, but with a couple important caveats when contemplating how to get a visa.

•   Having a valid passport isn’t always enough to enable travel. Many countries require your passport to have at least six months left before the expiration date at the time of your trip.

•   Applying for a passport in the first place can be a somewhat lengthy process; it may take as long as 11 weeks to get your passport in the mail after you apply. Even expedited processing, which comes with an additional fee, starts at five weeks of lead time. All of which is to say, make sure you have your passport ducks in a row well before you’re getting ready to actually apply for your visa.

Which Countries Require a Visa for U.S. Citizens?

Visa requirements change regularly. A case in point: The United Kingdom, which has long allowed U.S. citizens to travel without a visa, will soon require visitors to go through an online application system.

For the most up-to-date information — and before you lock in flights for a family vacation — check with the U.S. Department of State or your destination country’s travel agency to make sure you have everything set up for success before you head to the airport. At that time, you can also find out how long it will take to receive your visa. For e-visas, it may take just a couple of days.

That said, here are a few popular travel destinations that do require visas for U.S. travelers, along with notes to help you plan.

Country	Application Process	Fee	Duration of Visit
Australia	Apply online with the Australian Department of Home Affairs	AUD20 processing fee	Up to 3 months at a time over 12 months
China	China requires U.S. citizens to apply for a visa ahead of travel. Regular processing takes 4 days, and express service takes 3. You must have at least 6 months of validity on your passport and may need to meet other requirements, such as providing proof of round-trip air travel.	$140	Single, double, and multi-entry visas are available over the course of 6 months, and 12 months or more
India	You can apply for a visa online; processing may take 5 business days or longer	$25-$80, depending on visa duration	Not more than 180 days of any calendar year
Kenya	E-visa required, along with proof of yellow fever vaccination	$51	Visa is valid for three months from the date of issue and may be extended for 90 days
Russia	The U.S. Embassy calls Russia’s visa program “restrictive and complicated,” and it can take up to 20 days to get an exit visa if your visa expires during your visit. Still, it’s possible to apply for a visa ahead of time if you have your heart set on a visit, though the process will take research, time investment, and several steps.	$160	90 days in any 180-day period
United Kingdom	As mentioned above, the U.K. will soon require an Electronic Travel Authorization (ETA) of U.S. travelers. This is different from, but similar to, a visa. Processing will take a few days, but the application only takes a few minutes.	Free	180 days
Vietnam	You must apply for an e-visa online before arrival. Urgent processing is available, but normally processing takes 2 business days.	$17-$65 depending on visa duration	One-month single and multiple entry, and 3-month single and multiple entry visas available

Visa-Free Places for U.S. Passport Holders

To repeat the caveat again: The best way to know for sure if a visa is required is to research your specific destination ahead of time. That said, here are some popular destinations that are currently visa-free for U.S. passport holders. Note: This list is not exhaustive, and time restrictions may still hold.

•   American Samoa

•   Antigua and Barbuda

•   Argentina

•   Aruba

•   Belize

•   Bermuda

•   Brazil

•   Botswana

•   Canada

•   Chile

•   Colombia

•   Costa Rica

•   Curacao

•   Ecuador

•   Europe: Much of Europe allows visa-free entry for up to 90 days

•   Dominican Republic

•   Haiti

•   Honduras

•   Jamaica

•   Japan

•   Mexico

•   Morocco

•   Namibia

•   Nicaragua

•   Panama

•   Peru

•   Puerto Rico

•   Philippines

•   Scandinavia: Sweden, Denmark, Finland, Iceland, and Norway don’t require visas for stays of 90 days or less

•   Singapore

•   Senegal

•   South Africa

•   Thailand

•   Trinidad and Tobago.

Recommended: Where to Keep Your Travel Fund

Tips to Help Your Travel Plans Run Smoothly

Making sure you have the visa you need is only one part of travel planning. While you’re getting organized, here are a few more things to think about:

•   See if your furbaby needs a visa. Those traveling with pets may need to bring certain documentation in order to get their crate past customs. Otherwise, you might be unpleasantly surprised by a lengthy quarantine requirement.

•   Make sure your money is ready to travel, too. For international travel, it’s pretty key to have a travel credit card or cash back rewards credit card that doesn’t charge foreign transaction fees.

•   Get rewarded for air travel. If you usually fly with a specific airline, applying for an airline credit card could help you stack miles — and fly further for less.

•   Find ways to save. No matter how you slice it, international travel is expensive. Fortunately, there are plenty of ways to save on everything from lodging to rental cars — so you don’t eat through your travel fund all in one go.

The Takeaway

U.S. nationals are lucky to have a long list of countries that don’t require a visa for them to visit. However, some countries do (including popular destinations), so it’s important to research requirements. Find out if you need a visa for your trip well before your travel dates so you don’t run into unexpected delays.

SoFi Travel is a new service exclusively for SoFi members. Through a partnership with Expedia, we make it easy to find the lowest rates and book your reservations — for flights, hotel rooms, car rentals, and more — all in one place. Earn 2x rewards when booking with your SoFi Mastercard or debit card. And when you redeem your SoFi rewards for travel, you get a 25% bonus: $100 of reward points are worth $125.

Wherever you’re going, get there with SoFi Travel.

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¹See Rewards Details at SoFi.com/card/rewards.

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

Eligibility: You must be a SoFi registered user.
You must agree to SoFi’s privacy consent agreement.
You must book the travel on SoFi’s Travel Portal reached directly through a link on the SoFi website or mobile application. Travel booked directly on Expedia's website or app, or any other site operated or powered by Expedia is not eligible.
You must pay using your SoFi Credit Card.

SoFi Member Rewards: All terms applicable to the use of SoFi Member Rewards apply. To learn more please see: https://www.sofi.com/rewards/ and Terms applicable to Member Rewards.

Additional Terms: Changes to your bookings will affect the Rewards balance for the purchase. Any canceled bookings or fraud will cause Rewards to be rescinded. Rewards can be delayed by up to 7 business days after a transaction posts on Members’ SoFi Credit Card ledger. SoFi reserves the right to withhold Rewards points for suspected fraud, misuse, or suspicious activities.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.



Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

This article is not intended to be legal advice. Please consult an attorney for advice.

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When you apply for a credit card, the credit card issuer will ask you for your annual income. They want to be sure you have the means to pay your bills on time. Issuers may ask you to calculate your income in specific ways. For example, they may ask for net income or gross income when filling out an application.

If you’re single and work a salaried job, this may be fairly easy to figure out. However, for many people, income can be complicated and comes from a wide variety of sources. It also might be shared with a spouse.

Here’s a look at what you need to know about what annual income means on a credit card application, and how to know what types of income to include if you have multiple sources.

What Counts as Income?

For the most part, any money that is paid to you directly and that you have reasonable access to counts as income. This includes money you received from an employer or, if you’re self-employed, from clients. It can also come from other sources, such as investments or retirement benefits. Note that income tends to vary by age, and it is not the same as net worth.

The following are some examples of types of income credit card issuers may consider:

•   Salary and wages

•   Commissions

•   Tips

•   Bonuses

•   Income from a spouse or partner

•   Pension benefits

•   Social Security benefits

•   Public assistance

•   Alimony and child support payments that you receive

•   Interest

•   Dividends

You may not have to include alimony or child support payments as income on a credit card application. The reason? Credit card issuers understand that those payments may already be earmarked for the support of an individual.

Recommended: What’s the Difference Between Income and Net Worth?

What Is the Difference Between Gross and Net Income?

When it comes to calculating income, it’s helpful to know what gross income and net income mean.

Your gross income is the total amount of money you make before any other deductions are taken from it. Deductions may include things like taxes, 401(k) contributions, and health insurance premiums. Your gross income represents income from all sources.

Your net income, on the other hand, represents how much money you have once all deductions have been made. For individuals, this is their “take-home” pay, which can be considerably smaller than gross income. Credit card issuers may ask for net income as it represents money that you can access and isn’t earmarked for other purposes.

Tools such as spending apps can help you organize and manage the money you earn.

How to Calculate Your Gross Annual Income

Calculating gross income is relatively simple. You’ll need to add up income from all sources. For tax purposes, this will include wages, tips, bonuses, commission, capital gains, dividends, alimony, pension payments, interest, and rental income. You can find your adjusted gross income by subtracting above-the-line tax deductions, such as contributions to 401(k)s and traditional IRAs.

Credit card issuers can look at other income that’s not necessarily taxed, such as life insurance payouts of gifts. So be sure to include that in your calculation for a credit card application.

How to Calculate Your Annual Net Income

Calculate your net income by taking your gross income and subtracting deductions, including taxes, such as income taxes, capital gains tax, and employment taxes. You’ll also need to subtract contributions to retirement accounts and insurance premium payments.

If you receive a paycheck, there may be a line that spells out net income.

Recommended: How to Calculate Your Net Worth and Wealth

What Types of Income Don’t Count on a Credit Card Application?

There are some types of income that you can’t include on a credit card application. Generally, these are forms of income that you don’t have access to. For example, if your wages are being garnished to pay off a debt, you cannot include that amount of the garnished wages as income, as that money belongs to your creditor. Similarly, you can’t include money that goes toward alimony or child support payments or that you need to use to pay off tax debt.

What Happens If I Lie About My Income on a Credit Card Application?

It may be tempting to fudge your income on a credit card application. After all, tacking on a few thousands dollars to your income may be the difference between being approved for a credit card and being rejected. That said, you should never lie about your income on a credit card application. If you do, you’re committing fraud, and it’s a federal offense. So while it may not seem like a big deal to give your income a little boost, if you’re caught, you could face up to 30 years in prison and a fine of up to $1 million.

What Other Information Does a Credit Card Application Require?

In addition to income, you can expect a credit card issuer to ask for the following information on a credit card application:

•   Legal name and a valid U.S. address

•   Housing costs, which help the issuer determine how much debt you can afford to pay back

•   Your Social Security or Individuals Taxpayer Identification Number, which is needed for the credit card issuer to make a hard pull on your credit report to check your credit score

Issuers consider your credit score when they determine whether to extend credit to you. A high credit score shows lenders that you have a history of responsibly managing debts and paying your bills on time. Lower credit scores indicate that a borrower is less likely to make on-time payments, and lenders may be less likely to approve them for a card.

The best way to maintain a healthy credit score is to always pay your bills on time. You can receive a free credit report each year from the three major credit reporting bureaus: Experian, TransUnion, and Equifax. Check your credit report regularly to ensure there are no mistakes that could be dragging down your score. Report mistakes to the credit bureaus immediately.

The Takeaway

Credit card companies look at your annual income to determine how much credit you can afford and to assess their risk in extending you credit. Some may specify how they wish you to calculate your annual income, frequently asking for gross or net income. Gross income is the total amount of money you make before any other deductions are taken from it. Net income represents how much money you have after deductions have been made.

To calculate either figure, you’ll need to gather information about all your income sources. A money tracking app can help you keep tabs on your finances. The SoFi app connects all of your accounts in one dashboard so you can get a bird-eye view of your finances, track income and spending, and monitor your credit score.

Stay up to date on your finances by seeing exactly how your money comes and goes.

FAQ

What does it Mean when a credit card application asks for annual income?

Credit card companies may specify how they want you to report your annual income. They may ask for gross income, which includes all income before taxes and deductions, or net income, which is income after taxes and deductions have been subtracted.

What counts as annual income?

Annual income includes all money that you can say you reasonably have access to. This typically includes salary and wages, commissions, tips, bonuses, income from a spouse or partner, pension benefits, Social Security benefits, public assistance, alimony and child support payments, interest, and dividends.

What doesn’t count as annual income?

You cannot include income that you don’t have access to, such as garnished wages, alimony and child support payments you’re required to make, or money that must be used to pay off tax debt.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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If you don’t have a college degree, certain jobs may be out of your reach. But does that mean that you can’t feel professionally fulfilled? Absolutely not. There are many careers that don’t require post-secondary education and can provide workers with a sense of happiness and purpose.

Here’s a look at the characteristics that make a job rewarding, the industries that offer the greatest sense of well-being, and the most satisfying jobs you can get in those industries that don’t require a degree.

Characteristics of a Satisfying Job

It can be tough to pin down the characteristics of a satisfying job. That’s because satisfaction can be subjective. There are plenty of roles out there that you may prefer to avoid but others would be over the moon to try.

That said, the most rewarding jobs tend to share some qualities. According to the Urban Institute, good jobs typically offer:

•   Liveable wages that allow employees to cover basic needs.

•   Growth opportunity within the company to improve skills and advance.

•   Workplace flexibility and control over one’s schedule.

•   Benefits, such as paid leave, health care, and retirement contributions.

•   Safe working conditions.

Why Is It Difficult to Find a Satisfying Job Without a College Degree?

There are other characteristics you might find necessary to consider work satisfying. For example, you might want a job where you help people, like a doctor, or a job where you work with animals, like a veterinarian.

Unfortunately, without a post-secondary degree, your pool of available jobs will likely be limited. Depending on the job market in your area, that may mean you have to compromise on the job you choose or relocate so you can be closer to meaningful work you qualify for.

Recommended: Should I Go to Community College?

Tips for Finding a Satisfying Job Without a College Degree

It’s a good idea to start your job hunt with online search engines. Your search will likely lead you to large job sites that compile listings from industries across the country. If you’re looking for a particular type of role, you may want to try industry-specific job boards.

Networking and word of mouth are also good ways to find work. Reach out to people in your area who work in the industry you’re looking to join. Ask to meet with them to learn what you need to do to successfully apply for a job in that field, and put the word out that you are actively looking.

Just because a job doesn’t require a degree doesn’t mean you won’t be able to find one that pays well. Consider exploring high-paying trade jobs and high-paying vocational careers to find jobs that pay top dollar.

Once you begin to earn a salary, consider using a spending app to help you budget and track your money.

Recommended: 25 High-Paying Trade Jobs in Demand

Top 10 Most Satisfying Jobs You Can Get in America Without a Degree

Now for the tricky part: How to take a subjective measure like satisfaction and apply it to a list of jobs that don’t require a degree?

For this list, we looked at The Washington Post’s roundup of 10 industries that offer the greatest sense of well-being, which was based on data from the U.S. Bureau of Labor Statistics. Those fields include:

•   Agriculture, logging, and forestry

•   Real estate, rental, and leasing

•   Construction

•   Management, administrative, and waste

•   Information

•   Health and social assistance

•   Arts and entertainment

•   Transportation and warehousing

•   Wholesale

•   Retail

What are the most satisfying jobs in those industries? Read on for examples.

Forest and Conservation Workers

Forest and conservation workers typically help measure the state of forest and improve quality. They may work for state and local governments or for privately owned forest lands.

Median annual wage: $30,550

Job outlook: Employment in this industry is expected to decline 3% through 2031. However, there are still 2,300 openings for forest and conservation workers projected each year.

Real Estate Brokers and Sales Agents

Real estate brokers and sales agents help people who are looking to rent, buy, or sell properties. They tend to be self-employed and are usually able to set their own hours.

Median annual wage for real estate brokers: $62,010

Median annual wage for real estate sales agents: $48,340

Job outlook: Employment is expected to grow 5% through 2031, which is about as fast as average. There are a projected 54,800 job openings each year.

Construction and Building Inspectors

Construction and building inspectors work alongside or as part of a team to make sure that new buildings meet codes, ordinances, zoning restrictions, and match up with specifications made in building contracts.

Median annual wage: $61,640

Job outlook: Employment for this job is expected to decline 4% through 2031. However, there are a projected 14,800 new jobs annually.

Refuse and Recyclable Material Collector

As part of waste management infrastructure, refuse and recyclable material collectors collect and dump waste materials. Their job may include driving waste collection vehicles.

Median annual wage: $38,500

Job outlook: N/A

Library Assistant

Library assistants work in public, private, or university libraries helping to shelve and organize materials, assist patrons, and perform clerical tasks. The job typically requires a high school diploma, and may require a post-secondary certificate.

Median annual pay: $34,050

Job outlook: Library assistant jobs are expected to decline 4% through 2031, with a projected 24,000 openings each year.

Home Health Aide

Home health aides are among the fastest growing jobs. They help people with chronic disabilities or illness perform acts of daily living, like getting dressed and eating. They may work in a client’s home, a group home, or a day service facility.

Median annual wage: $29,430

Job outlook: Jobs for home health aides are expected to grow 25% through 2031, with about 711,700 openings projected each year.

Musician

Musicians sing or play musical instruments in recording studios or in front of live audiences in concert halls, clubs, and churches. Many singers work part-time.

Median hourly wage: $30.49

Job outlook: Employment for singers is expected to grow through 2031 by 4%, with 20,800 projected job openings.

Truck Driver

Truck drivers are charged with transporting goods from one place to another. It’s typically a pretty solitary line of work, but if being on the open road brings you happiness, it might be worth considering.

Median annual salary: $48,310

Job outlook: Employment is expected to grow 4% through 2031, which is nearly average for all occupations.

Material Recording Clerk

Material recording clerks help track product information and keep supply chains running and businesses on schedule.

Median annual wage: $37,870

Job outlook: Employment is expected to decline 3% through 2031, with 131,900 projected job openings each year.

Retail Sales Worker

Retail sales workers help customers in stores find the products they need and then ring them up at the cash register. They may also restock shelves

Median hourly wage: $14

Job outlook: Employment is expected to stay the same through 2031, with a projected 594,00 openings each year

The Takeaway

Not having a college degree doesn’t mean you can’t find fulfilling work. Satisfying jobs that don’t require a degree can be found in any industry, though certain roles may provide a great sense of well-being. Examples include a construction inspector, a real estate broker or sales agent, a retail sales associate, a musician, a truck driver, and a library assistant. As you hunt for a job, look for roles that match up with what you want in terms of the type of work, workplace, amount of social interaction, and wage requirements.

Once you find a satisfying job and start earning a paycheck, a money tracker app can help you manage your finances. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.

Stay up to date on your finances by seeing exactly how your money comes and goes.

FAQ

What are the most satisfying jobs?

According to a Washington Post analysis of Bureau of Labor Statistics data, the most satisfying jobs can be found in the agriculture, logging, and forestry industry.

What jobs pay over $100,000 without a degree?

It is possible to find jobs that pay over $100,000 a year and don’t require a college degree. One example is a construction site manager or a senior real estate manager.

How can I make $100,000 a year without a degree

If you want to make more than $100,000 a year without a college degree, begin by researching jobs that offer high wages and only require a high school diploma. You may then consider taking an entry-level position that allows you to gain the skills and experience needed so you can advance to higher wages.

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SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Fiduciary financial advisors are professionals who have a legal obligation to manage assets or give retirement advice with their client’s best interest in mind.

Among the guidelines fiduciary financial advisors need to abide by are avoiding conflicts of interest, being transparent (about fees and investments choices), acting in good faith, and being as accurate as possible.

Financial advisors aren’t the only professionals who can have fiduciary responsibilities. Lawyers, bankers, board members, accountants and executors can all be considered fiduciaries.

Fiduciary financial advisors cannot recommend investments or products simply because they would pay them bigger commissions. They can be held civilly responsible if they give advice that isn’t in the best interest of their clients.

What Is a Fiduciary?

A fiduciary is someone who manages property or money on behalf of someone else. “When you are named a fiduciary, you are required by law to manage the person’s money and property for their benefit, not yours,” according to the Consumer Financial Protection Bureau (CFPB), a government watchdog agency.

The CFPB provides an example of this, along with the requirements of being a fiduciary:

“For example, a friend of yours may name you her fiduciary through a power of attorney (POA). This means that you are responsible for her finances if she becomes sick or injured.”

As a fiduciary, your four basic duties are to act only in your friend’s best interest, manage her money and property carefully, keep her money and property separate from your own, and keep good records. Basically, you are to do your very best to manage her finances honestly.

In this sense, a person who is named as a fiduciary may not have any particular financial planning expertise. Therefore, they may still choose to hire out the actual work of managing the money to a financial expert. In doing this, they are exercising fiduciary responsibility.

What Is the Fiduciary Responsibility in Financial Planning?

Someone who acts with fiduciary responsibility will act in the customer’s best interest.

There is no universal standard for fiduciary responsibility because there are multiple agencies that act as regulatory bodies in the financial services industry.

The U.S. Department of Labor (DOL) is one, and the Securities and Exchange Commission (SEC) is another. Additionally, the organizations offering certifications, like the board of Certified Financial Professionals (CFPs), may provide their own guidance on fiduciary responsibility and code of conduct.

In 2016, the Labor Department issued what was called the “fiduciary rule,” requiring that any advisors offering retirement advice must act in their clients’ best interest. The rule was widely challenged from within the industry and subsequently overturned in the courts in 2018.

While there has been subsequent discussion about the DOL restoring the fiduciary rule, as of early 2023 there are no plans to do so. Rather, investors interested in working with financial fiduciaries are encouraged to inquire directly with various professionals, as there are still some guidelines in effect.

Broker-Dealer Fiduciary Obligations

In June of 2019, the SEC passed its own version of the fiduciary rule, called Regulation Best Interest (RBI). It says that all broker-dealers (which includes brokers) must act in the best interest of the retail customer when making recommendations, without placing their financial interest ahead of the customer’s.

According to the SEC, broker-dealers must adhere to the following obligations:

Disclosure Obligation: provide certain required disclosure before or at the time of the recommendation, about the recommendation and the relationship between you and your retail customer;

Care Obligation: exercise reasonable diligence, care, and skill in making the recommendation;

Conflict of Interest Obligation: establish, maintain, and enforce written policies and procedures reasonably designed to address conflicts of interest; and

Compliance Obligation: establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Regulation Best Interest.

Not everyone is convinced that the new RBI standards do enough to protect the consumer. Additionally, the new RBI rules may have actually weakened the need for some Registered Investment Advisors to work in a fiduciary capacity.

Questions to Ask a Fiduciary Financial Advisor

Because the rules of fiduciary responsibility remain somewhat up for interpretation, the waters remain a bit murky for some retail customers, and the responsibility for finding a fiduciary requires effort on the consumer’s part.

Ask questions, carefully consider investment recommendations, and challenge possible conflicts of interest. It is good to be in the habit of asking the person you intend to work with whether they’ll be acting with fiduciary responsibility. Do not hesitate to ask them outright, “Are you a fiduciary?”

Then, ask them to clarify what fiduciary responsibility means to them, their title, and the institution that they represent. Also, consider how they are being compensated, i.e. what does the financial advisor charge? Much, although not all, can be sussed out via the compensation model.

The Fiduciary Versus Suitability Standard

Previously, broker-dealers may have adhered to what is called the “suitability rule,” as opposed to a fiduciary rule. Although broker-dealers are now technically held to a fiduciary standard, it’s an important word to know, just in case you work with someone who does not fall under the SEC’s regulatory purview. Suitability is not the same fiduciary responsibility.

The rule by the Financial Industry Regulatory Authority (FINRA), a non-governmental regulatory organization, requires that a firm or associated person have “a reasonable basis to believe” that a financial or investment recommendation is suitable for the customer.

The firm needs to make this determination based on the customer’s “investment profile,” which can include age, other investments, financial situation and needs, taxes, liquidity and risk tolerance, among other factors.

How to Find a Fiduciary Financial Advisor

Finding a financial professional that assumes fiduciary responsibility is a great start.

That said, there is more to finding a trusted financial advisor than simply adhering to fiduciary standards. Being a fiduciary doesn’t guarantee that a financial professional offers the right service for you, or even that they’re someone that you’ll want to work with.

For example, a doctor may have a license to practice, but not a good bedside manner. Or, you may need a dermatologist, so making an appointment with a pediatrician won’t do.

Here are a handful of the services offered in the financial help space, along with their respective adherence to fiduciary guidelines.

Registered Investment Advisors (RIAs)

Generally, RIAs manage investment portfolios on behalf of customers. They may or may not offer other services, such as comprehensive financial planning.

Previously, all RIAs were held to a fiduciary standard. Counterintuitively, this may have changed with the new RBI standards, which may have loosened standards for RIAs.

Brokers

Brokers, such as a stock broker, are professionals who buy and sell securities on behalf of clients. Typically, a broker works on some form of commission from the sale of securities.

Before the RBI, brokers were not held to a fiduciary standard. They are now held to the new standards, though it remains to be seen exactly how this will shake out within the industry.

Certified Financial Planners (CFPs)

CFP^® may offer more holistic financial services, such as financial planning, budgeting, and personalized investment advice. Not all financial planners are CFPs — you may want to ask about the credentials of the professional you want to work with.

The CFP Board “supports a uniform fiduciary standard of conduct for all personalized investment advice. This fiduciary standard of conduct should put the interests of the client first, and should include both a duty of care and a duty of loyalty.”

Again, it is important to seek out the professional that will best serve your needs.

If a financial professional suggests a product or strategy, do not be afraid to ask questions.

How Are Fiduciary Financial Advisors Compensated?

Financial professionals are compensated in several different ways:

Fee-only

In this case, you would pay a financial professional, such as a CFP^®, a fee to sit down and discuss a financial plan or roadmap. This could be a one-time meeting, or meetings could take place at regular intervals (such as quarterly or annually). If a financial planner is fee-only, then they will not receive any additional commissions on products being sold.

Fee-based

An advisor who is fee-based may charge a fee and collect commissions. This fee could be a one-time or annual fee, or it could be measured as a percentage of assets under management. For example, an investment advisor could charge a 1% annual fee.

Assets under management

Similarly, some investment advisors and planners who manage an investment portfolio may charge a percentage on top of assets that are being managed.

Hourly

Some financial professionals may charge by the hour. This may be more common for financial coaching and planning than wealth management.

Commissions

Commissions typically come in the form of payments to the financial professional, from the company that creates the product. Commissions are common on insurance products, like annuities and life insurance, and some actively managed mutual funds.

It is possible that a financial professional be compensated in multiple ways. Be sure to ask.

A popular choice for those just getting started is a fee-only fiduciary financial planner. To find a fee-only fiduciary financial planner, you may want to check a database like XY Planning.

The Takeaway

Fiduciary financial advisors are professionals who are legally obligated to invest money or give retirement advice that’s in the best interest of their clients.

Among the requirements fiduciary financial advisors need to abide by are minimizing conflicts of interest and being transparent about how they are compensated. Acting in good faith and giving accurate financial advice are also guidelines that fiduciaries are supposed to follow.

Investors looking for trusted help should try to find a fiduciary financial advisor. Some robo-advisors and online investing platforms offer access to a financial planner who can answer questions for investors.

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