Finances are intimately woven into our lives. Choosing a financial advisor to guide you in your financial decisions can be a stressful process, but an important one. Having the right financial advisor on your team gives you peace of mind and can put you on a good financial path.
Whether you are looking for a financial advisor for the first time or you are looking for a new advisor, here are some key questions to ask:
1. How are you compensated?
Starting with this question is key to understanding the type of financial advisor you are working with. They should be able to answer the question quickly and with specifics. Are they receiving kickbacks for recommending certain investments? Do they have sales quotas to meet? Are they paid by salary or commission? Are they recommending the same investments to all of their clients? Why or why not? A planner who is paid by commission or sales versus a salary or hourly rate could have an incentive to steer you in a specific direction.
Ask for information about all of their fees and how much you will be paying per transaction, product and service. Also, ask about any additional fees you can expect from other services they offer. If the advisor is unwilling to answer or vague in their responses, consider looking elsewhere for a financial advisor. Continue reading