Picking the right financial adviser

Picking the right financial advisor can be tricky.
Picking the right financial adviser can be tricky.

You’ve thought about getting a financial planner or adviser, but how do you pick one who is reliable, trustworthy — and who will make the most of your money?

Listen to Steve Lockshin, one of the top three financial advisers in the nation according to Barron’s. In his new book, “Get Wise to Your Advisor,” Lockshin reveals how some of the biggest Wall Street institutions push their advisers to sell products that are not in customers’ best interests — and tells you how to get the unbiased service you deserve.

Do most people need a financial adviser?

It’s possible to handle your investments and savings on your own if you have one thing: discipline. Much like dieting, you know how to eat well and how to exercise; yet often you need something or someone to help you stick to your plan. A good financial adviser can help with discipline, and an online adviser can do the same, by automating good habits for you.

How much should an adviser’s fee add to your all-in costs?

You can get very good financial advice for as little as 0.15 percent of your assets, or about $150 for $100,000. Always ask what you’re paying — and how the adviser is paid — because the industry is riddled with conflicts of interest, buried fees and unnecessary complexity. However, by asking a few questions, and doing just a bit of homework, you can find the right fit. A good adviser can be worth their fee if they help you make great decisions (and keep you from making poor choices). The cost shouldn’t exceed 1 percent of your assets under advisement.

What is a fiduciary, and how do you know if your adviser will fulfill that role?

A fiduciary is an important distinction investors should rely upon. A fiduciary is required to give advice that’s in the client’s best interest, not their own. Before you decide to work with someone, simply ask: “Do you make commissions on my account, or do you make more by selling me one product over another one?” Beware the adviser who claims to be a fiduciary and who is still paid commissions that differ by product. Most fiduciaries won’t even accept commissions as a compensation tool!

How does automated investing fit in with the traditional advisory model?

Software-based investing is still a new field, but it’s poised to serve a wide variety of investors at a low cost. Software (like Betterment’s) uses automation to help you do things you might not want to do on your own, like saving steadily or rebalancing your portfolio.

Whether you choose a live adviser or an online adviser, it helps to have that extra reinforcement so you can reach your goals.


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