4 Questions to Ask Your Financial Advisor About Fees

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4 Questions to Ask Your Financial Advisor About Fees



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I am a fee-only financial planner based in San Diego, California. I help individuals and families across the nation live dream-lives, and leave enduring legacies.

My mission is to help you dream big, establish a solid financial foundation, make wise decisions with your resources, work with greater focus, and live an extraordinary life.

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Fees ~ Compensation ~ Commissions

Your financial advisor’s compensation should be an open book.

The way they are paid can potentially create conflicts of interest and increase your bottom line costs.


Fees ~ Compensation ~ Commissions

Whether you have a longstanding relationship with an advisor, or you are considering making a change…Here are 4 questions to ask your advisor about fees.


1. How Are You Registered?

• If your advisor is a Registered Representative for a securities or brokerage firm, then they are registered with FINRA. These types of advisors typically make their living on commission by selling financial products, stocks, bonds, mutual funds, etc.


1. How Are You Registered?

• If your advisor charges a fee for service or advice then they are generally registered with the SEC or by state, depending on the level of assets they manage. Fees are often taken either as a flat fee, or as a percentage of assets under management.


2. What direct compensation are you receiving from me?

• This includes hourly rates, flat-fees, commissions (from product sales, transaction fees within the accounts, etc.) and any other cost you may be charged to enact business with the advisor.


3. If I buy financial products from you, what kind of payment do you receive?

This question is a divining rod. If your advisor can’t answer this question quickly, clearly, and accurately it's

a red flag. © SEAN NISIL www.seannisil.com

3. If I buy financial products from you, what kind of payment do you receive?

• For example, if they are selling you a mutual fund, does the mutual fund company give them a commission for selling their product?– The same goes for ABC Annuity Company, or ABC

REIT Company, etc.• Often, these types of payments are not

obvious to the investor, and they may be a conflict of interest.


4. Do you have incentive to offer me one solution over another?

• Sometimes advisors are working to hit a sales goal for a vacation or bonus. – Make sure whatever

product or solution is being presented to you is in your best interests.



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Date post:	23-Jun-2015
Category:	Economy & Finance
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4 Questions to Ask Your Financial Advisor About Fees

Economy & Finance