We think misaligned incentives are at the heart of the disconnect between Wall St. and Main St. How can you tell if your advisor is on your side? We have found the following themes to be common to win-win advisory relationships:
Fee-Based Compensation
Do you pay your advisor on the basis of time (fee) or transactions (commission)?
Investment Freedom
Does your advisor suggest from an approved list of company "products", or does he/she have the freedom to select low cost, best-of-breed investments?
Confident Style
Is your advisor confident enough to put family money into the same investments that are suggested for you?
Once you're comfortable with the answers to these questions, the conversation can move to experience, investment philosophy, and risk management. We've included links to relevant items to consider from the following governing bodies:
FINRA - Selecting Investment Professionals
SEC - Investment Adviser Selection
