When choosing a financial adviser, make sure the adviser’s interests are aligned with your own. If the adviser gets paid on commission, are you comfortable that he or she is choosing the best investments for you and not those with the best commissions for him or herself? If you are paying the adviser 1% of your assets each year, will he or she keep your cash earning 0% in the account or will he or she have you move the cash outside of the adviser’s company so that you can earn 0.75% elsewhere? If you are retired, will your adviser suggest you pay off your mortgage when he or she may lose fees on that money removed from your account? When commissions on a $600,000 investment portfolio can take $30,000 out of your account on day one or a 1% annual fee can take $75,000 of fees from your account over 10 years (assuming 6% annual account growth before fees) plus another $23,000 in lost earnings on the fees paid, make sure your adviser is looking for every way to add value even at the expense of his/her own compensation.
Larry Pike, CFA
Client Priority Financial Advisors LLC