Goals-based planning, reasonable cost and good communication are key to a healthy relationship with your financial advisor, according to experts.
Instead, issues might arise if an advisor doesn't devote enough time to understanding who their client is as a person or their personal financial needs and goals.
Ultimately, a client's money — whether retirement savings or otherwise — is earmarked to help investors"You want to work with advisor doing some digging around those goals," Labotka said. "You might not have thought about that much as an investor. What are my deep goals here?"Of course, some investors may not expect that level of service.
They may be on the hunt for maximized investment returns without much regard for broad financial planning that accounts for cash flow, taxes, estate and long-term planning, for example.Cost is the No. 3 most frequently cited motivator for firing an advisor, behind lackluster quality of advice and relationship, Morningstar found.
"If they're charging 1% [a year] and all they're doing is portfolio management, that should raise some red flags," Hauptman said.director of investor protection at the Consumer Federation of America Advisory fees are often expressed as an annual percentage of a client's assets. A 1% fee on $100,000 equates to $1,000 a year, for example.for investment management services, you may feel the advisor's effort is worth it. The same logic applies across the range of advice services.Clients should figure out what their annual fees are in dollar terms and decide if it's worth it to them.
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