Why not ask your advisor!

Most of the time, there’s no direct charge for interacting with your advisor. The time they spend with you, your phone and email exchanges, analyzing your profile, notes, research and personalized recommendations all appear to be “free”. But advisors still need to earn a living!

Several different forms of compensation are available to advisors:

• Salary

• Commissions

• Fees (either hourly or a fixed sum agreed with the client)

• An advisor may also be entitled to bonuses, for example for growing or maintaining business relationships.

These different forms of compensation can also be combined. For example, an advisor may receive a salary plus commissions. What kind of compensation does your advisor receive? And why did they choose one method of compensation over another?

It’s not that complicated to find out. Simply ask! But don’t stop there.

It’s about more than what you pay

When a consumer consults with a financial services professional, they are entitled to a high quality of service. Don’t be afraid to ask your advisor about the type of expertise they’ve acquired over their career, the clientele they typically work with, the conferences they attend or present at, the work they do for you “behind the scenes” or how, according to them, they stand out from the competition.

CSF member professionals have market and economics expertise and keep their knowledge up to date through continuing education. They are also obligated to act in the best interest of their clients at all times and adhere to a range of ethics standards, including being transparent about their method of compensation.

Aside from your advisor’s knowledge, expertise and ethics obligations, another aspect to consider is the added value you receive from their services. Ask yourself these questions: Have my savings grown since I've followed my advisor’s recommendations? Does my advisor understand my financial needs and personal goals? Do they help me understand new financial concepts and topics? Do I have a clearer vision of my retirement plan? Am I less stressed about life’s ups and downs? Do I see my advisor as a coach?

Knowing how much you pay is important, but is your advisor truly giving you value for your money? It’s up to you to find out.