Questions for your financial adviser
You may recall an article in our Quarter 3 Newsletter discussing the Fiduciary Rule and the impact that would have on the type of guidance offered by financial advisors. The beginning stages of this rule were set to roll out this year and many financial firms had already begun restructuring their business models to adapt. However, it now appears that rule may not go in affect after all. The article we are sharing with you today suggests some great questions to ask when looking for the right person or firm to partner with on your investments. We have added in our answers to the questions as well. As always, if you have any questions about your portfolio or specific situation please give us call.
Tampa Bay Times, Jill Schlesinger
Now that the Trump administration has declared its intention to delay and potentially roll back the Department of Labor’s fiduciary rule, which would force financial professionals (and their firms) overseeing the nearly $3 trillion in retirement savings to work in their clients’ best interest, it may be a good time to review your relationship with your adviser, stockbroker or insurance salesperson.
Here is an updated list of questions to ask the person advising you on your investments:
Are you held to the fiduciary standard? Those who aren’t fiduciaries are held to a lesser standard, called “suitability,” which means that anything they sell you has to be appropriate for you, although not necessarily in your best interest
Yes, as a SEC Registered Investment Advisory firm ARS Wealth Advisors is held to a fiduciary standard.
How will I pay for your services? The adviser should clearly state in writing how she will be paid for the services provided.
We charge an annual fee based on the amount of assets under management. Our fee starts at 1% and we offer breakpoints as the minimum balance increases. We do not collect any commissions or sales charges, nor do we receive any reimbursements from fund companies.
The three basic methods are: fees based on an hourly or flat rate, fees based on a percentage of your portfolio value — often called “assets under management” — and commissions paid per transaction. How often you expect to trade, and whether you want your money pro-actively managed, will help determine which model works best for you.
What experience do you have? Find out how long the adviser has been in practice and where. Also ask if she has any professional certifications, licenses or designations. Some certifications include: certified financial planner; CPA personal financial specialist; chartered financial analyst. These certifications are governed by national standards-setting organizations and require adherence to the fiduciary standard. Members of the National Association of Personal Financial Advisors, an organization of fee only financial planning professionals, also adhere to the standard.
Our team has on average over 20 years of investment management experience combined with various designations including: Certified Financial Planner, Chartered Financial Analyst and Masters of Business degrees.
What services do you offer? Services offered can depend on a number of factors, including credentials, licenses and areas of expertise. Some conduct financial planning alone and do not sell financial products. Others may only manage assets.
ARS Wealth Advisors is proud to offer clients assistance with both financial planning and asset management. We are able to work with clients on a fee only or hourly basis to accomplish their financial goals. Through our close partnership with our professionals, we offer clients assistance with tax and legal advice as well on as needed basis.
What is your approach to financial planning and investing? Some advisers prefer to develop a holistic plan that brings together all of your financial goals. Others provide advice on specific areas, as needed. Make sure the adviser’s viewpoint on investing is neither too cautious nor overly aggressive for your risk tolerance.
When it comes to financial planning and the development of a sound financial strategy, each clients situation is unique. We work closely with our clients to identify their financial goals and the most appropriate strategy to meet them. For some clients, this may mean developing a financial plan and others may turn to us for just management of their financial accounts. For many clients, it is appropriate to do both.
Can you provide three references? Ask for two current clients whose goals and finances match your own, as well as a professional reference, such as an accountant or estate attorney.
We are always happy to provide references. Additionally, we work closely with accountants and estate planning attorneys and can provide you a professional reference to speak with them as well.
Do you have a financial interest in the entity that houses my account? When interviewing advisers not associated with large brokerage or insurance companies, ask if they use an independent third-party custodian or clearing firm (this is the entity that produces your statements), which prevents the adviser from having direct custody of your assets and adds another level of security for your account.
We do not have a financial interest in the entity that houses our client accounts. We use TD Ameritrade as a custodian and our clients grant us Limited Power of Attorney so that we may effect trades on their behalf.
Is there anything in your regulatory record that I should know about? Conducting background checks on the professional you may hire by visiting the Securities and Exchange Commission and FINRA websites or the state securities website NASAA as well as the CFP Board. While some violations should cause you to rule out an adviser (settlement of multiple customer complaints), others may be acceptable to you.
There are no adverse events on our regulatory record. We do encourage that you research any firm or individual that you chose to engage for your financial advising by checking the above named websites.
How often will we interact?Also ask whether the adviser will remain your primary contact.
We ask that clients agree to meet with us at least once per year so we can stay up to date on their goals and specific situation. We are happy to meet with you on a more regular basis to review your portfolio. Some of our clients like to review quarterly and of course, we are always available via phone or email to discuss any questions or concerns you may have. Additionally, we use technology to conduct virtual meetings with our clients who live out of state or travel. This is another great way to stay in touch. At ARS Wealth Advisors, we work as a team on your investment strategy, but you will have a dedicated advisor to work with.