Advisor client relationship pro and con

The Pros and Cons of Adviser Compensation Models

advisor client relationship pro and con

instance, reasons the quality of the physician-patient relationship can be compromised when a friendship develops. PROS AND CONS Advisor to Client. Yet while there are pros and cons to having multiple advisors, doing of robo- advisors is another: With new rules (Client Relationship Model. Pay Me Now: Pros and Cons of Adviser Compensation Models Pros: This adviser has a fiduciary responsibility to his clients and is invested in the most important factor to consider will be the relationship you will have with.

Pay Me Now: Pros and Cons of Adviser Compensation Models

Or a minimum level of fees I will be required to pay? Are there potential conflicts of interest I need to be aware of? How do you prefer to work with clients?

advisor client relationship pro and con

How much contact do you typically have with them? How will you keep me informed about investment performance and changes in the markets that impact me? How often will we review and adjust my financial goals? Give me an example of how you would explain a financial concept or product to me. What happens if you leave your current firm?

What privacy measures do you and your firm practice?

20 (or so) Questions for a Prospective Financial Advisor | MD Magazine

And this is not by any means a comprehensive list. But it should be enough to get you started. The important thing to remember is that just like in any job interview situation, interviewing an advisor is a two-way process. Also, the fee-only professional may have more limited offerings when it comes to securities and insurance products.

You may also find this adviser is incentivized to be more aggressive with your portfolio in order to grow his fees. Series 65 and possibly a non-producing insurance license in some states. Commission Based What it is: Typically, a financial professional who sells financial products and in return is paid by commission.

advisor client relationship pro and con

If appropriately licensed, this professional may offer greater diversity in product offerings, including the risk-management strategies you might want, including life, health, disability, annuities and long-term care insurance.

She may be incentivized to churn accounts to generate additional commission, and there is potential for conflicts of interest when it comes to directing clients toward higher-commission products.

advisor client relationship pro and con

Fee Based What it is: This hybrid compensation structure can be the most confusing, but, in my opinion it also has a lot of advantages. The adviser often starts with a base fee for a financial strategy, and if implemented, he may receive a commission or fee for the assets being managed. Yet while there are pros and cons to having multiple advisors, doing so can result in some expensive oversights, as Sheila Walkington can attest.

Walkington became a fee-only advisor, the co-founder of Money Coaches Canada worked at a firm that sold investments. A client learned the hard way that having more than one person handle her money could come at a cost.

The woman was widowed, and the two agreed that she should max out her registered retirement savings plan RRSP contributions. Several months later, the woman took the advice of an advisor at her bank — also to max out her RRSP contributions.

advisor client relationship pro and con

Story continues below advertisement "She totally overcontributed," Ms. He [the bank advisor] was trying to do the best thing for her, but I had already taken care of the RRSP contribution. If you're working with more than one advisor, somebody's got to be in charge.

According to Environics Research, almost a quarter of investors report working with more than one.

Advicent – the importance of client communication in financial planning

It found four key reasons why. It often happens when people who already have an advisor, change jobs to one with a group savings and retirement plan. They begin working with another advisor assigned through their new group plan, considering that plan a separate entity from their personal savings and investments.