Should I seek a new financial advisor?

Choosing an Advisor, IRAs
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October 2017
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There are no standard procedures. It all depends on the investments, your risk tolerance, etc. The following are differing structures most financial advisors use:

  • Percentage of assets that they manage on your behalf, typically anywhere from 1% - 2% per year. The more assets you have, the lower the fee.
  • Commissions paid to them from financial products you buy through them.
  • Combination of fees and commissions.
  • Hourly rate.
  • Flat fee to complete a specified project.

There are times that the percentage of assets is appropriate then there are other times that a commission is to your advantage. Personally, I use both. It depends on the client and the client's assets. It looks like you are being charged on the high end of percentage of assets perhaps because of the amount of your account. Is this your only account? Usually an advisor will give you a lower rate contingent on all assets under management or accounts. At times it is not in the client's best interest to be paying an ongoing fee specifically when their account activity demonstrates that they would be better served by being in a commission/transaction based account. This is a subject that is usually discussed prior to investing or entering into a relationship with an advisor. Or in your case, you may want to revisit the question with your advisor to see if you have any alternatives. 

It is important to always ask a financial advisor for a clear explanation of how they will be compensated before you hire them. ​If your current advisor is not willing to work with you regarding your concerns, I would look to interview other advisors that may have a more flexible compensation plan that puts your interests first. A broker's recommendation should be consistent with their client's best interests.


October 2017
October 2017
October 2017
October 2017