Who is your advisor and what do they do for you? This is a question that everyone should ask about their current, or prospective financial advisor. When I meet with a new client, they receive an ADV part 2. This is a disclosure document that explains who I am, how I am compensated, how I manage money, my background, experience, and education. Most importantly, this document also lays out any potential conflicts of interest I may have.

You receive this disclosure from my firm is because it (the firm) is licensed in way that requires it to work in your (the client’s) best interest. We refer to this as “fiduciary responsibility.”

It is very important that you read and understand what the advisor is explaining to you in this document. One of the first places I go when reviewing another firms ADV, are the fees. I want to see what they are going to charge, how and when. Most advisors charge an annual fee, billed monthly or quarterly in arrears. I have seen advanced billing in a couple of ADV’s recently. I personally don’t believe in billing my clients before I’ve done any work, but that’s just me.

The next thing I look for is, who is actually managing the assets? The firm, or contracted third party asset managers? In that case, I ask myself, Why am I giving my money to this firm that’s not even managing my money? Just to know them? We will diving further into all this during our workshop on December 5th, from 6 to 8pm, at University of Southern Maine in Portland. Please check out the event page for more details.