Is your advisor really independent? –  

Most financial advisors work for a broker dealer and are guided by client suitability.  There recommendations may be coming from their sales managers, mutual fund relationships or just selling products to generate a commission.  Even advisors that hold themselves out as independent, may in fact work for a broker dealer and be guided by the same rules.  If your advisor is truly independent, he will be fee only and required to be a fiduciary on your behalf, meaning that your best interest must come first, not the advisors.

What are my current fees? – In order to properly calculate the current costs of working with your advisor, you must do the following:

Advisor Management Fee + Expense Ratio of Mutual Fund or Separately Managed Account = Total Fee

For Example:  If your advisor’s management fee is 1.5% and the expense ratio of your mutual fund is 1.2 %, the total cost of your investments are 2.7%.  This will be subtracted from your the total return of your portfolio.  So, if your investments have returned 6% for any given year, your net return would be only 3.3%.  Over time, this will cost you thousands of dollars and could potentially delay the achievement of your financial goals.

Mutual Funds Investing vs. Index Investing



Am I financially fit?

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