From the category archives:
I usually recommend that investors avoid commission-paid financial advisors. The conflict of interests created by commissions is too great to overlook.
Of course, that still leaves several options:
Advisors who charge a fee equal to a percentage of your portfolio,
Advisors who charge hourly fees,
Advisors who charge a flat annual (or quarterly) fee,
Advisors who charge flat fees for [...]
{ 15 comments }
The Finance Buff recently wrote an article asking how much unbiased financial advice should cost. I think it’s hard to say how much it should cost because the value of the advice depends a great deal upon the circumstances of the person receiving the advice.
However, if you’re considering using a financial advisor, it can help [...]
{ 25 comments }
I’m currently reading Neal Frankle’s book Why Smart People Lose a Fortune. To say that we disagree on investment philosophies would be an understatement, but the book also contains a lot of ideas I agree with.
For example, regarding the selection of an investment advisor, Neal asks whether you would rather work with an advisor who [...]
{ 5 comments }
Yesterday I linked to an article from William Bernstein in which he explains why he no longer thinks that most people are qualified to succeed on their own in the realm of investing. He believes that most people need to hire help.
I’m not sure (yet) whether I agree or disagree. But I do want to [...]
{ 3 comments }
My (slightly) tongue-in-cheek reply to Carl’s most recent sketch:
Sorry for my poor freehand drawing skills in GIMP.
{ 3 comments }
If you had a friend who had come out ahead each of the last 5 times he went to Vegas, would you feel comfortable giving him your life savings to use the next time he went? Of course not.
So why do we let financial advisors take our savings to Vegas, so to speak?
Admittedly, there probably [...]
{ 16 comments }
For the most part, financial advisors from banks or “full-service” brokerage firms are paid based on commissions. They’re sales people. Having been one myself, I thought it might be worthwhile to discuss the specifics involved and the conflicts of interest that can arise as a result of such a payment structure.
40% Payout
On average, most financial [...]
{ 8 comments }
I subscribe to a daily email list called Help a Reporter Out. Essentially, reporters write in with stories they’re working on, and experts/bloggers/whoever else can email them to provide information. It’s been quite helpful building links for my tax blog, as there’s always somebody writing a story about taxation.
Today, however, a particularly noteworthy request arrived:
“In [...]
{ 0 comments }
This post is a follow-up to yesterday’s discussion about fee-only advisors as opposed to commission-based advisors.
Many people tend to ask the wrong questions when shopping around for a financial advisor. For example–as I mentioned yesterday–many people tend to focus entirely on how an advisor makes his or her money.
Other people tend to spend a lot [...]
{ 5 comments }
As far as I can tell, the most common piece of advice when it comes to choosing a financial advisor is to find one who charges on a fee-only basis (as opposed to one who makes a commission on each transaction that you make).
The reasoning is that this aligns the advisor’s interests with your own, because [...]
{ 6 comments }
