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How do I determine what my advisors fees are?

May 24, 2012 by Remy from Discovery Bay, CA in  |  Flag
5 Answers  |  6 Followers
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5 votes

Remy, There are two sets of fees. Advisor fees and investment fees. Advisor fees are pretty easy to understand. Simply ask your advisor, what are the fees you charge me for services provided?? He should give you full and detailed disclosure. The answer should not be confusing. If it is, then it's not good. Good Luck Dan

Comment   |  Flag   |  May 25, 2012 from Asbury Park, NJ

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4 votes
Thomas Jensen Level 16

Excellent question Remy! It can be rather difficult to determine unless you know where to look. Here are a few approaches (one doesn't exclude the other): 1) make sure you ask your advisor directly "how are you compensated and how much do you earn from having me as a client." Make sure you're comfortable with the answers given, if not, continue asking. 2) If you work with an RIA Representative you should have received the company's regulatory filing, the so-called ADV, when you signed on. You will find all fee disclosures and calculation methods in the ADV. 3) Read the prospectus of every fund you invest in. Not only will it tell you about investment policies, fund managers etc., but also about fee structures and costs related to management of the fund and whether the advisor is compensated (e.g. through sale of A, B and C shares) 4) Check your statements and see if you can tease out the actual advisor compensation (this is not a reliable method yet, but soon it will be) 5) Best approach is to go with a fee-only advisor. You'll know right upfront how much you end up paying for the advisor's service.

1 Comment   |  Flag   |  May 24, 2012 from Portland, OR
Thomas Jensen

Sorry, too many acronyms, "RIA" stands for Registered Investment Advisor

Flag |  May 24, 2012 near Portland, OR

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4 votes

Hi Remy, Thomas gives an excellent answer to this question. The only thing I would add would be to get it in writing. Ask your advisor to list all of the fees that you pay, as well as your advisor's total compensation, both monetary and non-monetary. This will not only help you determine your fees, but also help you understand if your advisor is being compensated by the very same investments they are recommending to you.

Comment   |  Flag   |  May 25, 2012 from St Charles, IL

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3 votes

Simply ask the advisor what their fees are; then become quiet and listen carefully to how they respond. Notice if their response is calm and clear - and if you UNDERSTAND what they are saying . If they are responding in an anxious manner, talking a lot and fast, using industry lingo that is confusing to you, it may be time consider a new advisor. BEST OF LUCK!

3 Comments   |  Flag   |  May 25, 2012 from Port Washington, NY

Excellent advice! I have asked in the past and the second part of your suggestion seems to fit the response I received.

Flag |  May 25, 2012 near Discovery Bay, CA
Thomas Jensen

Sounds like youshould shop around for a new advisor!

Flag |  May 25, 2012 near Portland, OR
Evan M. Levine, ChFC

Sounds like It may be time for a change. Ideally, you would find someone local through a referral. If that does not work, feel free to call me at 516.240.6161 or e.mail at evan@completeadvisors.com (We are based in N.Y) Thanks.

Flag |  May 25, 2012 near Port Washington, NY

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0 votes

Ask for the fee schedule.

Comment   |  Flag   |  May 31, 2012 from Plano, TX

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