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Should I Use the Financial Advisor Through My Bank?


Question: Should I Use the Financial Advisor Through My Bank?

Many banks offer the option to use their financial advisors for your investments. They may offer incentives such as lower fee transactions or free checking if you have an investment account at the bank. Generally, there is a minimum amount that they want you to continue to have invested through them in order to maintain the services.

People will choose to use their bank because they feel that the financial advisor is more trustworthy or because it simplifies the process of looking for a financial advisor. It is important to consider the way that the financial advisor is paid. A person that is paid entirely on commission may be more likely to suggest products that do not fall directly in line with your investment comfort level.

A financial advisor that works for a bank will likely be able to offer you a wide variety of investments as well as life insurance options. The brokerage fees should be comparable to other financial advisors that work specifically for a brokerage house or independently. It can be reassuring to have a reliable company and name when you are thinking about investing.

As you look for a financial advisor, you need to consider all of your options and not just choose the one that is most convenient. Ask around; do not be afraid to ask for referrals from other clients, this will let you know that the financial advisor is competent and reliable. You should also interview several and make sure that your financial advisor can explain the investment options to you and then will let you make the choice.

A good financial advisor will listen to your goals, and understand the amount of risk you are willing to take and then be able to find products that match those goals. Additionally, she should be able to explain the risks and benefits of each investment option and explain the way that you should spread your investments out over several options and in different risk categories in order to protect yourself. If she cannot do this then you should find a new financial advisor.

Finally, it is important to realize that if you do choose to go with a financial advisor through your bank that the FDIC does not insure the funds that are in investment accounts. This is a common misconception, but your funds are no safer investing through your bank’s brokerage department than they are using an online brokerage firm. That is why you should consider all options such as fees, and compatibility before making a choice.

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