Does your Advisor treat you like an Airline Customer?

Dirty Secrets of the Financial Advice Business – Part 1

When you fly on an airplane do you know how much the person sitting next to you paid for their seat? It might be more than you paid or it might be much less. How does that make you feel? Do you trust that the airline is looking out for your best interest?

No.

How about your financial advisor? Does he discount his advisory fees for some of his clients? Are you getting the best deal he offers? Does it seem right that you might be paying your financial advisor more than his other clients who have a similar portfolio value as you? Why should you have to be a great negotiator to get the best deal?

You might shrug your shoulders and say, “That’s just business. There is nothing I can do about it.”

Well, only if you accept it.

Try asking your advisor these questions:

“Am I getting the best advisory fee rate that you can offer? If not, why not?”
Be sure to ask, “Would you be willing to sign a letter stating that none of your other clients are paying a lower fee rate?”
And, if he is not willing to sign such a letter, ask, “Would you please disclose to me all the fee discounts you are offering your clients?” Of course, you aren’t asking for a list of his clients, just a list of all the discounts he offers.

These seem like reasonable requests. After all, your advisor is responsible for your money and your future. If you don’t have complete truth, trust and transparency from your advisor, then why is this person your advisor?

Is it time to make a change?

Cern Basher, CFA
President & Chief Investment Officer
Brilliant Advice