Selecting an Advisor

Should you use a Financial Advisor?

Many people have the ability to select suitable investments, put those investments in the most beneficial accounts, and facilitate a plan to produce the necessary income needed to replace their job at retirement. For those who do possess this ability, it is unlikely they hire and compensate a Financial Advisor to assist with this process. However, a larger percentage of the population isn't as comfortable with the process. If you are part of this population read the following strategy on how to choose a Financial Advisor.

Have you completed a simple background check?

You should select a Financial Advisor with a clean record that is registered with the Financial Industry Regulatory Authority (FINRA).  All registered Financial Advisors can be found by searching their full legal name at For full disclosure on me, search Gregory Brian Paine.

How do Financial Advisors get paid?

It is important to understand how Financial Advisors are paid. Undoubtedly, you as the client are going to be subject to some form of commissions or fees. There are three specific methods in which clients pay for these services.

  1. Commission or transaction compensation based on investment product selection.
    • Mutual funds have an upfront commission called a load, and typically a reoccurring revenue stream to the advisor called a trail or 12b-1 fee
    • Individual stocks have an upfront commission to buy and sell
    • Individual bonds have an upfront commission to buy and sell
    • Insurance products such as annuities have upfront commissions and reoccurring revenue streams to the advisor called a trail
  2. Fee or percentage based compensation.
    • Quarterly fee based on a set percentage of the assets under management.
  3. An hourly or mutually agreed upon yearly fee.

Independent Advisor vs. Non-Independent Advisor


  • Non-Independent Advisors - Are tied to certain funds and products that their company has pre-approved for them to use.
  • Independent Advisors - Have no ties to a certain company or product. They have the freedom to go out and buy the good they want which gives them more options to provide the client when choosing where to put their money.
  • Do you want to work with someone who has the freedom to choose funds for you like you have the freedom to choose an advisor or do you want to work with someone who is restricted in the type of products they can sell.

What are the advisors service standards?

  • How often does the Financial Advisor plan to communicate with you?
  • Do you have access to daily, monthly, quarterly and annual reports?
  • Does the Financial Advisor offer a goal-oriented retirement plan?

What are the Financial Advisors checks and balances?

  • Did you know you should never write an investment check to your Financial Advisor?
  • Does the Financial Advisor offer an independent custodian of assets?
  • Who is the record keeper of your investments?
  • Are all transactions recorded in terms of your cost?


  • What type of reporting does the financial advisor offer?
  • Other fees

Financial firms have developed a number of other fees associated with retirement and brokerage accounts, be sure to inquire about the following:

  • Custodian fees
  • Statement fees
  • Low household balance fees

Know what you want in a Financial Advisor and be specific.

  • Do you simply want someone to broker the purchase and sale of securities
  • Would you like a full scale financial plan
  • Would you like all of your wealth managed