Similar to a financial planner, an investment advisor should take the time to understand their client’s personal financial goals. For example, knowing when they would like to access their funds, and what they will be using the money for.
Also similar to a planner, an advisor will need to gather certain financial and personal data about their client. They will also need to have an understanding of their client’s risk tolerance and what their expected rate of return on investments is. Investment advisors use this type of data to analyze any current investments, and to make recommendations about to do going forward.
What kind of advice to expect from a good financial advisor
- What kind of investments to make
- Which investments to use inside of retirement accounts
- What the associated risks with each investment are
- Expected rate of return
- Which investments to own in non-retirement accounts
- What kind of taxable income the investments will create
- How to rearrange investments to try and reduce taxable income
- What taxes will be incurred when buying or selling investments
How much do investment advisors charge?
Most financial advisors will charge a fee that comes from a percentage of assets managed on behalf of their client. Depending on the advisor and/or the financial institution they are working for, an advisor may charge additional fees or may charge differently for their services.
For example, some may charge by the hour, charge a flat fee, charge a retainer fee, earn commissions from financial products purchased, or possibly a combination of commissions and fees. It’s best to just ask up front to avoid any surprises or confusion later on.
How to know if an advisor is good
A good advisor will not make any recommendations until they have a complete picture of their client’s timeline, investment experience, financial goals, and risk tolerance levels. They will want to know where all of their client’s investments are to make sure that their entire portfolio makes sense. If not, their client could end up owning the same investments, only in different accounts.
Some investment advisors may also offer advice about financial planning. Asking questions to get a total picture of the services required will help those in need of any type of financial services and advice know what will be best for them and their financial future.
For anyone located on the Sunshine Coast and in need of investment help and advice, try speaking with one of Ethica’s financial advisors to see if we can help you reach any of your financial goals. Visit about-why-choose-us to learn more and to contact us today.