- Do you know the true cost of your investment holdings?
- Does your salesperson/broker receive commissions?
- Does your salesperson’s firm capture any special distribution or marketing fees at your expense?
- Does your salesperson have sufficient training?
- Does your “robo-advisor” force you to hold too much cash?
“Well, I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes that I don’t get some surprise that pushes my limit a little farther.” – Charlie Munger
There are many high integrity salespeople who fashion their services as investment or financial advisory to the best of their ability. They should be applauded. However, the wealth management industry has historically been a slimy business littered with commissions, multiple fee layers, flimsy investment rigor and weak qualifications. Along these lines, we encourage a strict examination of our approach to providing financial advice while protecting and growing our client partners’ capital. Further, here are some questions to think critically about when hiring an investment advisor:- Do you receive commissions to sell certain financial products?
- Do these commissions at times limit my ability to sell these products without an additional fee?
- Does your firm receive any special distribution fees for certain funds or financial products?
- What are your academic credentials? For instance, do you have a college degree in business or finance? Did you complete your Masters in Business Administration (MBA)?
- What are your professional certifications? Are you a Chartered Financial Analyst (CFA)? Are you a Certified Public Accountant (CPA)?
- Do you own your firm? Do you have management or shareholders that you report to?
- Does your “robo-advisor” force my portfolio to hold a high cash balance so the “robo-advisor” can make money at my expense?
Investment advisory services offered through Essential Partners, a registered investment adviser.