Recently, Jason Zweig, the personal finance columnist for The Wall Street Journal, wrote an article titled, “The 19 Questions to Ask Your Financial Adviser.” It’s a very good list. We agree with most of his answers and we recommend you consider asking these questions to the financial advisor who works with you.
Here are a few of his key questions and answers:
1. Are you always a fiduciary, and will you state that in writing? (Yes.)
2. Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services? (No.)
8. Do you earn fees as adviser to a private fund or other investments that you may recommend to clients? (No.)
11. Do you earn fees for referring clients to specialists like estate attorneys or insurance agents? (No.)
13. Do you believe in technical analysis or market timing? (No.)
15. How often do you trade? (As seldom as possible, ideally once or twice a year at most.)
19. Who manages your money? (I do, and I invest in the same assets I recommend to clients.)
However, there was one question in Jason’s list where we disagree with his answer. The question is:
5. Are your fees negotiable? (Yes.)
At Brilliant Advice, we believe the answer should be a clear “no.” Here’s why:
As fiduciaries, we must always act in our clients’ best interest. Among other things, we take this to mean we must treat all our clients fairly when it comes to the fees they pay. Is an advisor treating all clients fairly if he or she is giving a handful of clients discounts? No, that’s favoritism. We want our clients to know they are receiving the best possible rate we offer, with no exceptions.
To be fully transparent, we have a fee calculator on our website that allows prospective clients to calculate the fee they would pay and to compare it to the advisory fees they are currently paying. It also shows how much they could save over 10 years. We aren’t yet aware of any other firms that don’t negotiate their fees and wonder if there are any other true fiduciaries out there.
For more on this, read our blog post: Does Your Advisor Treat You Like an Airline Customer?
Click here to read Jason Zweig’s full article.