What you should ask your financial advisor today

Fsp Invest, 21 Aug. 2013

Tags: financial advisor, money manager, costs, fees, what you should ask your financial advisor, disclosure of fees,

The financial industry is good at keeping its customers in the dark about what they are spending. Now not all fees and charges are unfair. But there are still things to look out for…

Some financial advisors and money managers provide a range of financial services, including asset allocation, stock and bond recommendations, reporting, and so on.

Most of them will charge you a fee for financial advice, Mark Ford explains in Daily Wealth. Some will also collect commissions on any transactions.

One of the biggest problems with money managers and financial advisors is that they like unit trust funds. They like unit trust funds because they are easy. But as you know, unit trust funds are very expensive.

And that's not all… With a money manager, you will likely pay other fees, too that you’re not even aware of.

There is an argument that fee-only financial advisors and/or money managers are better because you don't have to pay transactions costs. This is not necessarily true.

Your account could still have certain transaction costs charged separately. The money manager doesn't receive this fee, but you pay it.

You need to ask for full disclosure of ALL costs and fees

The only way to know what you are paying a financial advisor and/or money manager is to write them a letter asking them to disclose all costs clearly and fully.

If you use a money manager or financial advisor, you should expect him to be completely forthcoming and transparent about what you are paying.

If you aren't sure, the first step is to ask him in writing, "Please send me a clear and comprehensive account of all charges, fees, commissions, and other costs I am paying for your service."

And ask him to copy his manager on that message.

As with stockbrokers, there are some situations in which you may be happy to pay the fees they are charging. And there are certainly financial advisors and money managers who are smart and caring and do a good job.

But you need to know exactly what the costs are – immediately and over time.

Then, and only then, can you decide if these sorts of services are good for you.

Related QA

d.c.heger asked:
MY QUESTION IS – I bought Bitcoin & Etherium some time ago – at first they grew nicely but now they are lower than what I paid for them. Should I [read more]
Published at 04 Apr. 2018 in: Investing 5 shares due to rocket 1 Answer
kavesh.maharaj.73 asked:
Hi Josh. I would like some advice on TFSA. I can get an interest rate of 7.8% nominal at a bank if I invest the R33k upfront in a fixed deposit [read more]
Published at 19 Mar. 2018 in: Investing Tax free savings vehicle 2 answers
kavesh.maharaj.73 asked:
Hi Josh Quantum wants to buy back shares from shall investors at what I think is a low price of around R3.86. You tipped the share in February [read more]
Published at 14 Mar. 2018 in: Investing Real wealth 5 answers
elizastrydom asked:
Hi Timon I am interested in registering for your Red Hot Storm Trader service. I am already a Red Hot Penny Shares investor. My question is [read more]
Published at 28 Feb. 2018 in: Investing Trading platform and broker 1 Answer
ManuE asked:
I have an interest in investing in Bitcoin, I just don't know how. If I buy Bitcoin with R15 000, how much can make (Return On Investment)? [read more]
Published at 25 Feb. 2018 in: Investing Investment 1 Answer

Related articles:




Youtube Twitter Facebook

Connect with us:    

  • Accelerated Investor
  • Accessories
  • Accountancy