What does a financial disclosure statement provide?

A financial disclosure statement is a crucial document that serves to promote transparency between financial service providers and their clients. It primarily outlines the fees associated with financial products or services and highlights any potential conflicts of interest that may exist. This information is vital for clients as it enables them to make informed decisions regarding their financial relationships. By understanding the costs involved and any biases that may arise from conflicts of interest, clients can better assess whether a financial advisor's recommendations align with their best interests.

This focus on fees and conflicts of interest is essential in building trust between clients and advisors, as clients need to comprehend how their advisor is compensated and whether there are incentives that could influence the advice they receive. This awareness helps clients to navigate their financial options more effectively and fosters a more transparent advisor-client relationship.