It’s important to ensure you are getting appropriate value for the financial advisor fees you pay. Ultimately, money spent on financial advice should lead to more informed decisions about how to structure investment accounts, how to allocate your portfolio, what investments make sense and what steps need to be taken to reach your financial goals.
In order to justify the cost of a financial advisor, we believe investors should expect these four things in return:
1) Sound Financial Advice
There is a wide range of information your financial advisor should be able to provide you, including how to structure your accounts, deciding which accounts to use for income, assisting with important financial decisions and events, and helping with your estate plan.
It helps if your financial advisor is a Certified Financial Planner (CFP)—they should be able to offer advice pertaining to more areas than a normal financial advisor, including insurance and tax planning.1
2) A Comprehensive Investment Plan
Your financial advisor should take a comprehensive approach to mapping out and understanding your finances for your future. This includes your retirement income needs, your estate planning needs and a regular review of where you stand financially relative to your goals.
This information should be used to produce an investment plan—a document that serves as a blueprint for achieving your goals, which you can reference over time to see how you’re doing.
3) Investment Recommendations Based on Thorough Research
We believe a financial advisor should focus on three things: building an investment plan for their clients, servicing their clients, and conducting rigorous research on money managers and investment solutions.
Thorough research can translate into finding good money managers with strong track records, which a financial advisor can then use to offer to their clients as a solution, depending on the client’s goals and risk tolerance.
4) Excellent Client Service
In our view, this point is perhaps just as important as the others. An investment plan should be all about the client—their needs, their goals, their family. A client should be able to call their financial advisor directly on any business day and talk about where they stand financially.
A financial advisor should also regularly update their client’s investment plans and encourage involving and speaking with family members that are affected by the investment plan.
Are Your Financial Advisor Fees Justified?
After considering the information above, can you confidently say that your financial advisor fees are worth it? Are there areas that are lacking as it relates to your investment plan? If you answered yes, then you may want to consider what needs to improve and what steps you can take to improve it. Perhaps that involves speaking with your financial advisor about these issues, or maybe exploring other options.
If you would like any guidance or would like us to examine your current investment plan to see if you’re “getting what you pay for,” please do not hesitate to contact one of our Wealth Managers at 1-800-541-7774. They are happy to help.
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