8 Questions to Ask When Hiring a Financial Advisor

Hiring a financial advisor can be a daunting task.  Perhaps you had a negative experience in the past that left a bad taste in your mouth.  Or maybe you have a family friend that has been trying to get you to use them for the past few years, but you want to make sure you assess their capabilities dispassionately. Whatever your situation may be, here are 8 questions to ask when interviewing prospective advisors for you and your family:

1. What is your corporate affiliation?

Some firms are part of banks or other institutions that “sell their own wares” to clients.  Pinsker Wealth Management offers securities and investment advice through LPL Financial, the nation’s largest independent broker/dealer.*  We have no corporate products to sell, no investment banking relationships to promote, nor any other business conflicts to get in the way of providing unbiased advice and guidance to our clients.

2. What is your fee structure?

Know what the true costs of investing are before you sign.  For the majority of our clients, we charge an annual fee based on a percentage of their assets.  That means that our compensation is transparent and depends on your account’s performance.

3. Are there any additional transactional fees?

Many discount brokerage firms hook people in with low-cost initial trades only to increase them later.  We do not charge commissions on trades for our advisory clients; however certain other charges may be applied by LPL Financial.

4. What type of financial planning services do you provide?

People who call themselves “financial planners” may just be using a computer program to do all the thinking for them.  True financial planning and wealth management requires looking at your entire financial picture, imagining contingencies and identifying tax-efficient ways to save and spend, in addition to transferring wealth to the next generation.

5. How do you build your clients’ portfolios?  Do you use any outside managers? 

Some firms may use outside managers that provide incentives to the advisor to use their funds.  We believe that this is a fundamental conflict of interest, which is why we build all of our portfolios in-house, and customize our clients’ investments based on their risk tolerance, overall financial situation and long-term goals.

6. How do I access my account?

We provide our clients with 24/7 access to their account online via a password-protected and encrypted website.  From there they are able to monitor account performance, access past and current statements, print tax documents, and even store important documents such as power of attorney and health power electronically, allowing them to be accessible in an emergency.

7. How are my investments protected?

It is important to know how your assets are invested and what kind of protection they have.  Our broker/dealer, LPL Financial, is a member of the Securities Investor Protection Corporation (SIPC).  This provides account protection up to a maximum of $500,000 per customer, of which $250,000 may be in cash. For an explanatory brochure, visit www.sipc.org. Additionally, through Lloyds of London, LPL Financial accounts have securities protection to cover the net equity of customer accounts up to an overall aggregate firm limit of $575,000,000, subject to conditions and limitations.

8. How is my account monitored?

Statements can be confusing or even misleading.  Our quarterly color performance reviews break down your total holdings and show detailed performance for each individual position as well as the  account as a whole.  We also show you how your account did versus relevant benchmarks such as the S&P 500 Index and the Barclays Aggregate Bond Index.

Call our office at (336) 294-1811 x104 or email jerrold.pinsker@lpl.com to schedule a complimentary consultation.