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You have entrusted your money and assets with a financial advisor, and all seems to be going smoothly. At the moment, you do not need any money, so there is no reason to withdraw or move it, right? It may not be that simple. Below are some questions to ask your current or potential financial advisor during your next consultation.
Many financial advisors, especially those who are affiliated with large name brokerage firms, are paid by fees taken directly out of your accounts on a quarterly basis.
These fees can range anywhere from 0.5% all the way up to 2-3%.
In a flat or slow market, that may result in a net loss for the given circle. In a down market, it is even worse.
This is most likely the compensation arrangement your financial advisor has if you are invested in stocks, bonds, or mutual funds. Pay close attention to transactions portion of your financial statements since the fees will be clearly listed.
If you subtract those fees from your gains (or add it to your losses), you will see how your savings are being affected. Make sure you take into account any load fees on mutual funds and variable annuities as well.
These may not be going to the financial advisor, but they are still affecting your bottom line in a negative way.
When you start taking income from your hard-earned savings, your investment strategy could change.
Where you were once aggressively chasing a return, you now may want to find guarantees for your principal that you have worked so hard for.
If the financial advisor is paid on a fee schedule, switching you to a product that has a guarantee for the principal will cause the income stream from your account to stop and a one-time commission will be paid.
These financial advisors are still in their working years and are wanting to have a dependable income stream just like you.
You come across an online advertisement for a new product from Acme Insurance Company that sounds like a perfect solution to something that you have been worried about.
You call your financial advisor to learn more and possibly purchase it.
They tell you that they cannot sell you that product, but they have a great alternative product just like it.
Before you agree to anything, ask for a side-by-side comparison of both products to ensure that it is similar and close to what you want or need to satisfy your financial goals.
A financial advisor`s responsibility is to find you the best strategies for your financial needs. If they are not taking the time to learn what you are concerned about and creating a customized plan, then they are not doing their job nor working in your best interest.
If your financial advisor has a big or popular company name, they could be a “captive agent” or broker. Captive agents or brokers are only allowed to sell the products that their company sells. This applies to some banks, large brokerage firms, and property/casualty agents who also have investments and insurance options.
Your agent/broker should have access to multiple companies.
There are many actuarial factors at play when a company builds a product and they are specific to that company.
Products differ in many ways and what fits your wants/needs may differ from someone else`s wants/needs.
Some companies (including those that work within a captive arrangement) can possibly offer only a handful of products at any given time.
If you would like a second opinion on your current financial situation or know you need a new financial advisor, please contact us for a complimentary consultation today!
Where you were once aggressively chasing a return, you now may want to find guarantees for your principal that you have worked so hard for. If the financial advisor is paid on a fee schedule, switching you to a product that has a guarantee for the principal will cause the income stream from your account to stop and a one-time commission will be paid.* * Guarantee is based on the claims paying ability of the insurance company. No guarantee is provided or implied by Infinity Financial Network, Newbridge Securities Corp or Newbridge Financial Services Group'
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