Tim Yessin
Wealth Management Advisor

What type of investment advisor are you?

Some investment advisors, such as those at WealthSouth, work as Fiduciary Advisors. Fiduciary Advisors are required to act in the best interest of their clients both legally and ethically. There are other financial advisors that work as Broker/Dealers. Broker/Dealers can buy and sell securities on behalf of their clients under the standard of care defined as the Suitability Standard, meaning that the securities recommended must be suitable for that particular client.

How are you compensated?

All financial advisors are compensated for the work they do. Many financial advisors are paid through the products they sell, which in many cases can be extremely high, sometimes as high as six percent. Some advisors, like those at WealthSouth, charge a fee (usually around 1% annually) on the average balance of the portfolio, which is a much better arrangement for clients.

Do you invest in proprietary products?

Some financial advisors will only invest in products managed by the companies that employ them. Most of the time, there are better and less expensive investment options available outside those firms. WealthSouth, for example, researches and recommends custom products with no proprietary bias.

What is the process you use to select the securities within my portfolio?

When do you sell?  Even though answers to these questions can be technical, beyond the understanding of some clients (which is why you rely on an advisor in the first place), you should be able to get a general grasp of the selection process for the securities in your portfolio. Your advisor should be able to explain whether they are active or passive securities, whether they have limits on the concentrations of securities held in your portfolio, and how much turnover an average portfolio experiences per year among other things. Moreover, your advisor should be able to tell you who will make those decisions.

What allocation do you recommend for my portfolio and why?

Perhaps the most critical element in reaching your financial goals is your portfolio’s allocation – the proportion of stocks to bonds (also called equities to fixed income). Getting to the proper allocation requires a great deal of understanding of the client’s financial goals, which generally requires more than just a casual conversation between the advisor and the client. Will this money ultimately be used for retirement? For educational purposes? Maybe for a legacy? Understanding the purpose of the funds is only half of the equation. The advisor must also understand the client’s personal investment history, risk tolerance, and family dynamics. A deep understanding of these subjective elements coupled with the objective goals leads to a sound relationship between the advisor and the client, enhancing the likelihood of successfully meeting the client’s financial goals. When evaluating a prospective investment advisor, it is extremely important for clients to understand the processes employed by the advisor to acquire this insight.