Whether you’re building up a retirement nest egg, saving for your child’s education or exploring a new investment strategy, selecting an investment advisor to assist you with your financial goals can be intimidating. In a market saturated with choices, it’s important to take a thoughtful, informed approach when you pick an investment advisory firm. Here are a few considerations to keep in mind when choosing a partner to manage your wealth.
Look for a firm that has a fiduciary duty to their clients, which means that they are legally required to act in your best interest and put your financial gains before their own. A firm or advisor that is a Registered Investment Advisor (RIA), as defined by the Investment Adviser Act of 1940, is held to this standard and is confirmed by either the Securities and Exchange Commission (SEC) or state securities authorities. This responsibility also ensures that there are no conflicts of interest when it comes to investing your money. When advisors are required to put your gains before their own, you can feel secure in the quality of advice they provide.
Make sure the firm you select emphasizes regular, open communication with their clients. Financial advisors should proactively share accurate, timely information about investments, and shouldn’t withhold any insights that might impact client decision-making. Investment portfolio advisors should be willing to speak with clients in person to answer questions, address concerns and provide expert insight. You should have access to an easily accessible online system that delivers information about your investments and receive routine electronic communication with updates about your wealth.
Fees and Commissions
We encourage you to look for a fee-only financial partner. These advisors usually charge a flat fee or a percentage of the investments they manage on your behalf, with the percentage decreasing slightly as assets exceed a fixed point. Fee-only advisors do not receive commissions, eliminating potential conflict of interest in the investments he/she recommends. In contrast, commission-based advisors collect a fee for their services in addition to accepting payment earned from the sale of financial products. If this information isn’t listed on the company’s website, ask about their compensation in your initial meeting. Transparency is essential, especially when it comes to how advisors are paid. Additionally, the industry standard is to bill on a quarterly basis, and clients typically receive an invoice after their initial meeting. However, we encourage you to check for firms that bill less frequently and only after they have provided you services for several months — allowing more of your money to work for you and gain returns. Your advisor should be open and honest about payment, and what it means for your investments.
An investment philosophy is a firm set of beliefs and principles that drive an advisor’s recommendations and approach to handling your wealth in the long-term. These evidence-based values guide their market strategies and determine how they pick investment funds. Make sure that you understand your advisor’s philosophy — it should be brief and to the point — and that it aligns with your financial goals and values.
Does the firm you’re considering simply provide advice about your investments, or do they offer more comprehensive financial services like college, retirement or charitable foundation planning? Evaluate your current needs and future goals, and then match them to an advisor with a wealth of experience in those areas of expertise.
This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, Association. All efforts have been made to report or share true and accurate information. However, the FIRM is unable to verify the content and the content is subject to change and become materially inaccurate without notice. For additional information about FIRM (CRD # 108058) please visit the SEC Website at www.adviserinfo.sec.gov. For a copy of the firms ADV Part 2 Brochure, please contact us at 941-365-3435. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Although we monitor comments left on this page, we do not endorse or necessarily share the same opinions expressed by site users. Please honor our request to limit your posts to industry-related educational information and comments.