You can use this free tool to get matched with advisers, from our partner SmartAsset,<\/a> as well as sites like CFP Board and NAPFA.)<\/p>\n\u201cMost reader complaints and stories have to do with the sale of annuities and REITs because commissions taint advice. Your example may be one of an adviser abusing a fiduciary fee model, the assets under management (AUM) model. There are very few situations where charging a 3% advisory fee could be considered reasonable,\u201d says certified financial planner Mark Struthers at Sona Wealth Advisors.<\/p>\n
When advisers do financial, estate and tax planning, charging more than 1% is not unheard of depending on the asset level. \u201cThere would be a lot of extra non-investing time and expertise to justify anything close to 2% or more and it does not sound like that is the case in your situation,\u201d says Struthers.<\/p>\n
To begin, \u201cI would suggest you ask for a copy of the client agreement that your mom signed for asset management services and if the adviser\u2019s stated fee was 1% but he actually charged 3%, you can take him to arbitration and possibly get a credit,\u201d says Favorito. However, an adviser often has the authority to increase their fees in their client agreement. \u201cAt the same time, they are typically required to notify you of this change in advance and if they didn\u2019t, you may have a case,\u201d says Favorito.<\/p>\n
Document everything. \u201cIt\u2019s an adviser\u2019s job to document everything as well. If you\u2019re missing documents, you should easily be able to contact them to obtain the documents needed. Save copies of all your statements, as well as any documents with disclosure agreements that you signed. It\u2019s also important to print out or take screenshots of any emails, text messages or phone calls that you\u2019ve had with the adviser. It\u2019s crucial that you do this while everything is still fresh in your mind,\u201d says elder law attorney and financial adviser Patrick Simasko at Simasko Law.\u00a0<\/p>\n
Next, ensure your mother\u2019s money and investments are safe and that no further damage is done. \u201cGiven that this adviser and their firm may not behave appropriately, I would make sure you and any new firm are staying on top of the ACAT transfer. Try to stay on top of all the positions coming over. Some firms that behave poorly will often use investments that may not transfer electronically so be aware of what needs to be sold and the consequences,\u201d says Struthers.<\/p>\n
Continue to be an advocate and after you get to a good place, it may be time to consider some estate planning and what-if scenarios. \u201cBeing with a big firm means little as far as long-term safety. If anything, the pressure to produce revenue for the upper management can make things worse. And they can find backdoor fiduciary ways of getting more revenue, like a bank adviser investing funds in structured notes issued by the same bank. They get the advisory fee and the hidden fee with the structured note,\u201d says Struthers. <\/p>\n
When large banks say they\u2019re fiduciaries, it\u2019s possible they\u2019re pushing their own products that have built-in incentives. Large banks also tend to have sales quotas where advisers are encouraged to produce a certain amount of revenue, which can cloud what\u2019s truly best for the client. When looking for an independent adviser, ensure they\u2019re fee-only, meaning the only fee they\u2019re paid is from you. They should be transparent about their compensation and use a third party custodian to hold your money. CFPs are considered the gold standard in the financial planning industry as they have the highest level of training and an ethical commitment to put clients\u2019 best interests ahead of their own.<\/p>\n
Once everything is settled, you could go online and write a review about your adviser. \u201cBe truthful and write it from the standpoint of wanting to let people know of your experience. If you\u2019ve had an unpleasant experience, it\u2019s unlikely you\u2019re the first person. That\u2019s why before you find a new adviser to work with, you should go online and look at reviews,\u201d says Simasko.<\/p>\n
As far as looking for a new adviser, while a referral can be a good starting point, it\u2019s crucial to conduct your own due diligence. \u201cBlind trust in a relationship can sometimes lead to overlooking red flags. Start with fiduciary organizations like XY Planning Network or the National Association of Personal Financial Advisors (NAPFA) and then narrow down your search. Credentials are no guarantee of good behavior, but often, the bad actors are the ones who prefer shortcuts. Prioritize rigorous credentials like Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP) which require extensive training and difficult exams, as a sign of an adviser\u2019s commitment to the profession,\u201d says Struthers.<\/p>\n
Have an issue with your financial planner or looking for a new one? Email questions or concerns to picks@marketwatch.com<\/a>.<\/p>\nQuestions edited for brevity and clarity. By emailing your questions to The Advicer, you agree to have them published anonymously on MarketWatch; they may appear anonymously in other media and platforms.<\/p>\n","protected":false},"excerpt":{"rendered":"Question: \u201cOur 80-year-old mother was widowed in 2011 and when her adviser moved to a large investment banking…\n","protected":false},"author":2,"featured_media":273979,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[9437,125497,45,49,48,3525,125498,6896,133,106304,125496,131,132,7712,26205],"class_list":{"0":"post-273978","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-banking","9":"tag-banking-credit","10":"tag-business","11":"tag-ca","12":"tag-canada","13":"tag-corporate","14":"tag-corporate-industrial-news","15":"tag-credit","16":"tag-finance","17":"tag-industrial-news","18":"tag-mpsmartasset","19":"tag-personal-finance","20":"tag-personalfinance","21":"tag-retirement-planning","22":"tag-synd"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/273978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=273978"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/273978\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/273979"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=273978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=273978"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=273978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}