Choosing Your Financial Advisor

Thinking about reaching out to a financial advisor? It’s a good idea to talk to a professional about your financial needs and hopes and how to best achieve them. But there’s a little prep work that you can put in to make sure you are using the right advisor AND are getting the most bang for your hard earned buck.

These two simple questions can help put you on the right path to success (and make sure you check out our Financial Advisor Specialists – it’s an easy way to know you have a vetted professional that understands your unique needs.)

Question 1: What kind of advisor should I work with?

You want to hire someone that will act as your fiduciary ALL of the time with ALL of your money (is ALWAYS looking out for your financial best interests).

There is a great analogy that you want your financial analyst to be more like a nutritionist than a butcher. The butcher will push you to eat meat and often the best (most expensive) meat while the nutritionist wants you to eat what is best for you and doesn’t have any stake (no pun intended) in how much meat you eat…unlike the butcher.

Having said this, it’s always good to know how much money your Financial Advisor will be making and how they will be making it so make sure you ask. See our question sheet for examples.

Question 2: How much advice do I need?

If you want to start saving or set financial goals to meet, you may want to pay a financial advisor to work with you to create a financial plan. Financial plans include a review of your net worth, goals and objectives, investment portfolio, cash flow, investments, retirement planning, tax planning and insurance needs, as well as a plan for implementing your goals. Having a financial plan created by a professional usually costs from $1,000 – $5,000.

You also may want your financial advisor to manage your portfolio for you and hand over the reins completely. While we don’t necessarily recommend this for the long term (at a minimum check in to see how your money is doing at least quarterly), letting a professional manage your portfolio can take a big item off of your plate. Costs for full management are often about 1% of the total assets managed.

There are also ‘robo-advisors’ (technology-based) that rely heavily on technology and algorithms to manage your money at a fraction of the cost.

Sample Financial Advisor Question Sheet

Please note, there are no ‘correct’ answers to these questions however, the responses your financial advisors provide may prompt some additional questions as to why he/she selected that option for you and what other options may be out there that could work better for you and for your goals.

  • If offered extra products/features:
    • How much extra will I pay in fees (or how much might I sacrifice in returns or payouts) if I elect this product/feature?
    • Are there any penalties for pulling my money out early?
    • What if I elect to take my money in monthly payments?
  • For any sub-accounts in my annuity, are there expense ratios or fees? A separate management fee? Trading fees? Administrative fees?
  • How much money will you personally make in cash commissions if I select this product? How much will you make factoring in any sort of trailing/ongoing commission?
  • Is there a bonus you are eligible for that comes as a result this investment strategy? Is it in jeopardy is you don’t make this sale?
  • Are you earning more from selling me this product then you might from putting me in a similar product from a different company? Are you earning more than you might if you put me in a different program from the same company?
  • Is your company or the company that created this product running any contests that might lead you to getting a reward if I buy this product?
  • Do any of the companies you work with offer ‘due diligence’ trips where you spend an hour learning about the products and many more golfing/eating?
  • Are there other forms of payment you receive that are of value i.e. points for merchandise?​
  • Does your firm stand to collect any fees that you will not share in as part of your commission because they have favored one product or another or limited their platform to certain products and locked out others?​
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