Sweater Weather and Financial Advice: Part 3

Now that you know about the different types of advisors, let’s talk about a few other things you should know: how advisors get paid and potential questions to ask during your interview.

But first, you should know what a fiduciary is and be aware of the best interest standard.

What is “fiduciary” vs the “best interest” standard?

All financial professionals selling insurance-based products including “variable” life insurance (aka. life insurance where all or part of the value is based on what the stock market does) is required that professional act in your best interest when they recommend a product to you. 

A fiduciary is held to a higher standard and is legally and ethically bound to put your interests before their own on an ongoing basis as they are managing your investments. 

How Advisors Get Paid

There are generally three ways that financial professionals are paid, and some pros use a combination of these structures: 

  1. Fees–Some professionals charge a fee for services which can vary from pro to pro. Some are fee only which means the only income they receive from you is the flat fee you pay them, which could be hourly or annually.  “Fee based” means they may receive additional commission or income depending on the products used in their financial plan.
  2. Commissions–These advisors make their money from the financial institution they work with when they sell a product. 
  3. Assets Under Management–These investment professionals make a percentage based on the amount of money they manage for you.

So, when it comes to picking the right financial advisor, there’s no one-size-fits-all answer. Your choice depends on your goals, preferences, and unique situation. 

Before making a decision, do your homework: research, interview potential advisors, and pay attention to qualifications, fees, and potential conflicts of interest. Armed with this knowledge, you can confidently choose the financial guide who will help you reach your financial goals.

If this is overwhelming, don’t worry. I am happy to have a quick chat to help get you started in the right direction regardless of where you are at right now.  Book a time that works best for you HERE

Questions to ask during the interview

  • “What’s your background and experience in financial advising? How did you get into this line of work?”
  • “How do you get paid for your services? Are you fee-based, commission-based, or a combination of both?”
  • “Can you explain your investment philosophy? I want to make sure it aligns with my financial goals and risk tolerance.”
  • “Do you have any specific success stories or client testimonials you can share? It’s always reassuring to hear about your track record.”
  • “How often do you typically communicate with your clients, and what’s your preferred method?”

Now you are ready to start interviewing potential advisors and/or coaches! I always love to hear about the progress you are making so drop me a message and let me know the strides you are making!

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