The financial advisory profession has grown dramatically over the years, and investors have more choices than ever before, not only in how they invest but also in the advisor services they select.  Here are questions you should consider if you are seeking advice with your finances and how you can make meaningful differentiations between providers.

Are you a fiduciary?

Advisors who act in a fiduciary capacity are required to make recommendations based on the best interests of their clients. A fiduciary financial advisor participate in a special relationship of trust, confidence, and legal responsibility. They must have undivided loyalty to their clients and operate with a duty of care and utmost good faith.  Through our practice, this is done through an Advisory relationship.

The alternative standard is more transaction-based.  Traditional advisors are held to a less strict standard of conduct; they are required to make recommendations that are suitable based on each client’s individual circumstances.  Agents who offer products on behalf of a firm must strike a balance between meeting sales objectives to generate profits and ensuring investments are appropriate for a particular client.

How do I enter into a fiduciary relationship with my Financial Advisor?

Only after you and the firm enter into an advisory agreement does the Financial Advisor have a fiduciary duty under the Investment Advisers Act. In such agreements, the firm and your Financial Advisor explicitly acknowledge an advisory relationship and obligations to you. When acting as your investment advisor, we provide you with disclosure documents about our Advisory services.

How are you compensated?

Typically, there are three types of compensation options for working with a professional wealth advisor:

  • Fee-only: clients pay a flat fee for the advice or plan generated by the advisor.
  • Fee-based: advisors earn compensation based on the assets they are responsible to manage; they earn more when investments values increase and less when values decrease.
  • Commission: costs are based on each transaction in a particular product or investment vehicle.

It is important to understand the costs associated with both the services provided by an advisor as well as any costs associated with the underlying investments being recommended.  Are there any minimums?  We believe true value can be found in the confidence that one gains from working with a knowledgeable, experienced professional.

Fees for Advisory programs include Advisory services, performance measurement, transaction costs, custody services and trading. Fees are based on the assets in the account and are assessed quarterly. There is a minimum fee per calendar quarter to maintain these types of accounts.

Do you have experience working with clients similar to me?

Whether your goal is to save for retirement, develop a plan for charitable giving, or generate income to maintain the standard of living you desire, you want to find someone who understands the elements of your circumstances and needs.  Find out if the advisor has a particular area of specialty or serves a more diverse range of investors to assess whether the advisor is familiar with specific issues that may require detailed attention in your case.

What are your qualifications?

There are many paths to becoming a financial advisor.  Some may have exclusive careers in finance while others may have transferred skills from another profession.  Similarly, certifications such as CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Financial Analyst® (CFA®), or Certified Investment Management Analyst® (CIMA®) all require stringent standards of mastery and ongoing education, which can provide insight about individual competency and level of sophistication.

What is your investment philosophy and how do you manage investment portfolios for your clients?

Investment philosophy, or style, describes the approach an advisor will employ to arrive at the desired results.  It includes not only the investment vehicles, such as stocks, bonds, or mutual funds, but also incorporates the methodology. Some may focus on companies with promising earnings (fundamentals), underpriced companies (value), or businesses in high-demand areas (growth).  These are just a few examples, but as a whole, you will want to identify how the advisor addresses factors like returns, risk, costs, and tax consequences.

What can I expect if I work with you?

Products and standards of service can vary widely from practice to practice.  Ask about the frequency of meetings and interactions you can expect when working with a particular advisor, as well as his or her accessibility when questions or concerns arise.  Some advisors may favor a “self-service” model, offering resources and tools to their clients who want to access information independently, while others may periodically reach out at prescribed intervals or offer proactive contact in response to economic events or potential opportunities. Consider your own needs and preferences to see if they are compatible with the approach being described.

Answers to questions such as these can provide awareness about the individual you are considering, but ultimately, selecting a financial advisor comes down to relationship. How did you feel during the meeting? Can you envision a long-term partnership? The decision to team up with a professional advisor should be based on your own level of confidence and trust. When you find someone who listens, is qualified, and demonstrates genuine interest in putting his, or her, talents to work for you, it can be a very reassuring indication to move forward.

If you are searching for a financial advisor, we’d love to hear from you. At Moran Wealth Management, we work with clients from all 50 states—so no need to be based in Naples, FL.

If you contact us today, we’d be happy to answer these six questions and how they specifically relate to Moran Wealth Management. Also, we invite you to take a deeper look into our website. You’ll find more information on our team, our portfolio styles and investment philosophy.

Additionally, you can always keep informed of our economic, investment and market outlook by signing up for our bimonthly commentary.

 

Tom Moran

Founder, Chief Executive Officer

Senior PIM Portfolio Manager

P: 239-920-4440 | F: 239-431-5239

Thomas.Moran@MoranWM.com | www.MoranWM.com

5801 Pelican Bay Blvd, Suite 110, Naples, FL 34108

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN). Moran Wealth Management is a separate entity from WFAFN.

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