Your top financial adviser questions answered

Financial advisers do not come in a one-size-fits-all package – decide how much help you need

Financial advisor
Linde Carroll
LINDE CARROLL Sustainable Wealth Management

When it comes to researching financial advisers, sometimes it feels like there are more questions than answers. To save you some time deep-diving on the internet, we’ve answered a few of your most burning questions. Below, we laid out some answers to the most common financial adviser-related queries on Google.

What does a financial adviser do?

Financial advisers do not come in a one-size-fits-all package. While financial advisers can help with all types of financial advice and planning, it’s important to begin by deciding what type, and how much advice you need. Financial advisers can help with financial planning, retirement planning, investment selection and management, insurance and risk management, debt management, tax planning, small business planning, legacy planning and education planning, to name a few.

In terms of the time investment on the adviser’s end, you can choose from a variety of services ranging from high-tech automated portfolio investment and advice, to a comprehensive and in-depth, personalized relationship with an adviser or team of professionals. Almost all financial advisers will want to meet with you to discuss your current financial situation and goals. This could include saving for retirement and other goals, allocating or managing investments, budgeting, insurance, estate and tax planning. Ultimately, the right adviser will work with you to develop a game plan to help get you on track to achieve your financial goals. You’ll typically have an ongoing relationship with your adviser to help implement your plan, monitor your progress and adjust as needed.

How do financial advisers make money?

Your financial adviser should explain their fee structure in your initial meeting, if not before. While historically the only available model was the commission model, pay structures have expanded giving investors more options and helping to reduce possible conflicts of interest. Below are the most common types of pay structures.

  • Assets Under Management (AUM) Model: Financial advisers can get paid a percentage based on how much money they oversee for you.
  • Commission Model: In this case, when a broker sells you a financial product, he or she receives a specific percentage payout for the sale.
  • Hourly Rate Model: If you have a few questions and want to consult with a professional, you’ll pay an hourly fee for answers.
  • Retainer for Services Model: You are charged a set monthly or annual fee. Cost usually isn’t linked to how much you have available to invest, but you may pay more if your situation is complex.
  • Fee-For-Service Model: If you want a basic financial plan, you might pay a flat fee to have the financial adviser create that plan for you.

Tips for finding a financial adviser?

Asking the right questions is an important part of finding the right adviser for your needs. Be sure to meet with potential advisers and ask about education and certifications, experience in the industry and the types of services offered by the firm. Ask about their investing philosophy and preferred types of investments.

It’s also helpful to find out if they are governed by the fiduciary standard or suitability standard. Those held to a fiduciary standard are required to act in your best interest at all times. The suitability standard is a little less stringent, meaning recommendations must simply be appropriate to your needs. Be sure to find out their fee structure so you understand how you will be charged and why.

Linde Carroll, CFP® is an Investment Consultant at Vancouver-based investment management and financial planning firm Sustainable Wealth Management. She can be reached at linde@sustainablewealthmgt.com.

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