Clarity and transparency are fundamental to the process regarding who will manage your hard-earned wealth. The more wealth you have accumulated, the more you have at risk, so it’s important to have open, frank discussions with Greenville fiduciary investment advisors you are considering.

Depending upon how comfortable you are in understanding the investment world, you may or may not be asking the right questions to financial advisors to make a truly objective hiring decision. Oftentimes, people hire based on personalities vs. competency and experience.

In this blog, we’ll look at a series of questions that you should be asking potential Greenville financial advisors, such as how they operate, how they are compensated, and how they can tailor their services to fit your unique financial goals.

Fiduciary Status

The first question you should ask is whether the advisor is only a fiduciary. Why is this important?

Working with a fiduciary financial advisor becomes increasingly significant as your wealth grows because a fiduciary is legally bound to act in your best interests. 

The core difference between a fiduciary and a non-fiduciary financial advisor lies in this obligation to prioritize your financial well-being. 

Fiduciaries must avoid conflicts of interest or disclose them when they cannot be avoided. They are typically compensated through a fee structure, such as a percentage of assets under management, which aligns their success with yours. 

Non-fiduciary advisors, however, are not held to the same standards.  They will use ambiguous language saying they can act as a fiduciary, but seldom volunteer the reality that they are not always a fiduciary.  This can lead to good recommendations for them but not necessarily for you.

Financial Advisor Compensation

Every potential financial advisor you meet with should be open and upfront about their compensation model. Any advisor who won’t disclose this information or has a complex explanation that lasts longer than 10 seconds should be considered a red flag. 

When it comes to how financial advisors get paid, it's not one-size-fits-all. There are mainly three types: fee-only, fee-based, and commission. 

• Fee-only is straightforward. Advisors charge you directly for advice, planning services, and investment management. This could be an hourly rate, a flat fee, or a percentage of the assets they're handling for you. 
• Fee-based advisors charge you directly for their advice but can also earn commissions if they sell you a specific financial product or investment. It's a hybrid model, blending the straightforward nature of fees with the layered elements of commissions, revenue sharing, and additional fees.  
• Then there's the commission-based model. These advisors earn commissions on their products, like mutual funds, insurance policies, or annuities. Some advisors may offer products developed by their firms. Understanding how they are compensated for these products can help you assess whether these offerings are genuinely in your best interest or are recommended based on the advisor's or the firm’s financial gain.

Investments

Your financial advisor should have a robust process for evaluating and selecting investment products. They should be willing to discuss how they assess these products' suitability for your specific financial situation and goals.  

Portability is also a significant consideration, especially if you're concerned about liquidity and tax implications. Your advisor should clarify whether the recommended investments can be transferred without necessitating a sale that could incur capital gains taxes.

Considering using CDs in your investment strategy? Watch our managing partner, Joe Hines, share his views on this strategy.

Understanding the degree of personalization in your investment strategy is key. Suppose your financial goals or situation require a unique approach. In that case, knowing if your advisor can provide a tailored investment plan rather than a one-size-fits-all portfolio is important.

Understanding how much personalization your advisor can offer you is also important. It has become increasingly common for advisors to outsource their investments function to a third-party asset manager who often will manage standardized model portfolios.  You advisor should have a hands-on approach to developing portfolio solutions that reflect your risk tolerance, or incorporate specific investment preferences that align with your goals.

Tax Planning

Tax efficiency is a critical component of any comprehensive financial plan. Your Greenville investment advisor should have tax planning strategies to grow and protect your wealth from excessive taxation, thereby preserving more of your assets for your future and heirs.

Communication Matters

Understanding how a financial advisor in Greenville plans to communicate with you once you're a client is key to your decision-making process. You’re setting the ground rules for a relationship; you want to know what to expect. 

There’s nothing worse as an investor than having a non-responsive advisor, especially when markets are volatile. You need the assurance they are looking after your assets with proper care.

Also, ask about the frequency of meetings. It shouldn’t be just about quantity; your meetings should focus on quality communication and relevance to your concerns. 

And how about the mode of communication? We're in an era where a chat could mean a quick phone call, a detailed email, an in-person meeting, or even a video call on Zoom. 

It's about finding a rhythm and methods that work for both of you, ensuring that your financial goals are always in clear focus.

Technology

In today's digital age, having on-demand access to your financial information is more than convenience; it's necessary. Ensure your advisor offers modern, secure platforms that allow you to monitor your investments anytime, anywhere.

Summary of Questions

Here are some questions you can use during your search for a new financial advisor:

• Is your financial firm only acting as a fiduciary? 
• How are you compensated? 
• Do third-party managers compensate you? 
• Do you use proprietary products your firm produces? 
• How are the products you are recommending aligned with my values and goals?
• Would I be subject to surrender penalties if I want out of my investments?
• Are you using a third-party asset manager, or do you handle investments in-house?
• How do you develop tax planning strategies?
• How will I be able to communicate with you?
• How often will I meet to review my financial plan and investments?
• What type of technology do you provide to your clients to review investments?

By asking these targeted questions, you can better understand whether a potential advisor is the right fit for your financial aspirations. Remember, the relationship you build with your financial advisor is a cornerstone of your financial well-being, and as such, it should be approached with careful consideration and mutual respect.

Get to Know Global View

Global View Investment Advisors is a fee-only fiduciary investment advisor firm in beautiful Greenville, SC. We service clients in South Carolina and nationwide. 

In a world where financial advice often comes with strings attached, you're entitled to a partner whose only interest is your success. At Global View, our specialists are here to guide you through the complexities of financial, investment, tax, and estate planning. Together, we'll craft and execute a strategy that leads to seamless portfolio management, freeing you from the stress and uncertainties of wealth management. 

Ready to learn more about our services? Let’s connect.