Whether you’re a seasoned investor or new to wealth management and in need of financial advice, there are some important things you should know when speaking with a financial advisor.
Tim Yessin of WealthSouth — one of Lexington’s largest Wealth Management firms that has served the Bluegrass since 1909 — shares five questions you should ask a financial advisor to feel confident in your financial journey. 💸
What type of investment advisor are you?
There are two primary types of investment professionals with different approaches in operating and serving their clients. Some investment advisors, like those at WealthSouth, work as Fiduciary Advisors, and are required to act in the best interest of their clients both legally and ethically.
The other type, Brokers/Dealers, can buy + sell securities on behalf of their clients under the Suitability Standard of care.
How are you compensated?
All financial advisors are paid for the work they do for you, but it’s important to know their compensation structure. Bonus: There could be cost savings for you.
Do you invest in proprietary products?
Some financial advisors will only invest in products managed by the companies that employ them. Most of the time, there are better + less expensive investment options available outside of those firms.
What is the process you use to select securities within my portfolio?
An advisor should be able to explain how they select stocks, bonds, mutual funds, etc. for you — and who at their firm makes those decisions.
What allocation do you recommend for my portfolio and why?
A critical element in reaching your financial goals is your portfolio’s allocation. Read: The proportion of stocks to bonds (also called equities to fixed income).
Getting to the proper allocation requires a great deal of understanding of your ultimate financial goals, which generally requires more than just a casual conversation between you and an advisor.
Keep reading for a full explanation on why these questions are so important to ask a financial advisor.*
