Many banks offer financial advisory services alongside traditional banking services. The convenience, alongside offers like free checking, make it a tempting offer. But should you use the financial advisor through your bank? Here’s what you need to know about working with a financial advisor through your bank, and if that’s the best option.
Financial Advice Through a Bank - What to Consider
Banks offer critical financial services, but that industry wasn’t designed to provide investment advice and other financial advisory services. While many banks do offer these services, they’ve been added on to their original offerings - and often come with a much steeper price tag.
You also have to consider if an advisor through your bank is afiduciary.A fiduciary is an individual who acts in the best interest of a particular person or beneficiary. Financial advisors who work through a bank may not be a fiduciary - meaning, they can (and are often encouraged) to offer you financial advice that’s in the best interest of the bank, not necessarily what’s the best option for your investment.
With an advisor through a bank, there always exists that uncertainty about their conflict of interest - how can you be sure that your advisor is offering you the best advice for you, and not just the advice that benefits the bank the most?
Financial Advice from a Greater Midwest Financial Group Financial Advisor
A financial advisor is someone who offers advice on both your short-term finances and long-term finances. They can help you plan where to save money, how to invest your money and what types of accounts to open.
The benefit of choosing a financial advisor that isn’t affiliated with a bank is you remove that conflict of interest, as well as better rates for those services.Every financial advisorat Greater Midwest Financial Group is a fiduciary, anda Five Star Wealth Manager.
Work with our experienced financial advisors and get the chance to:
- Explore the amount of risk you should take for returns you can potentially expect
- Ease the transition during pre- and post-retirement years
- Plan for the future - no matter what’s in store
- Manage and grow your assets
- Invest wisely and strategically
- Plan for college, retirement, elder care and other major life expenses
You can depend on GMFG to offer the best advice for your situation, to maximize your investments and return.
Greater Midwest Financial Group is a financial advisory firm serving St. Paul, Minneapolis, and the wider Twin Cities area. We specialize in wealth management, retirement planning, asset management, and other personal finance needs.
FAQs
But should you hire a financial advisor that's affiliated with your bank? For most people, a bank is their main provider of financial services. But this does not necessarily a bank is the right place for your retirement savings: They may not offer you the advice and services you need.
Can I trust my banks financial advisor? ›
It's important to note that not all bank advisors are bad financial advisors – they're usually really great and friendly people, but they're part of a system where they are told what to sell and that typically translates into the highest fee, most profitable investment products for the bank, not their customers, like ...
How much money should you have to use a financial advisor? ›
Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.
At what point is it worth getting a financial advisor? ›
A financial advisor is worth paying for if they provide help you need, whether because you don't have the time or financial acumen or you simply don't want to deal with your finances. An advisor may be especially valuable if you have complicated finances that would benefit from professional help.
What to avoid in a financial advisor? ›
Here are seven mistakes to avoid when hiring a financial advisor.
- Consulting with a “captive” advisor instead of an independent advisor. ...
- Hiring an individual instead of a team. ...
- Choosing an advisor who focuses on just one area of planning. ...
- Not understanding how an advisor is paid. ...
- Failing to get referrals.
Potential negatives of working with a Financial Advisor include costs/fees, quality, and potential abandonment. This can easily be a positive as much as it can be a negative. The key is to make sure you get what your pay for. The saying, “price is an issue in the absence of value” is accurate.
How to know if a financial advisor is good? ›
Here are four traits you want to look for when gauging whether a Financial Advisor is suitable for you:
- They work with you. ...
- They take a holistic view of your finances. ...
- They develop and customize your investment strategy. ...
- They have the support of an investment team. ...
- There is a lack of transparency.
Best personal advisors compared
| Broker | Best for | Assets under management |
|---|
| J.P. Morgan Wealth Management | Beginning investors | $4.3 trillion |
| Empower | Higher net worth | $1.3 trillion |
| Fidelity Investments | Rewards | $4.4 trillion |
| Vanguard | Low fees | $7.6 trillion |
3 more rowsJun 13, 2024
But they don't offer their advice for free. While the typical annual financial advisor fee is thought to be 1%, according to a 2023 study by Advisory HQ, the average financial advisor fee is 0.59% to 1.18% per year. However, rates typically decrease the more money you invest.
Is 1% fee for financial advisor too much? ›
Bottom Line. On average, financial advisors charge between 0.59% and 1.18% of assets under management for their asset management. At 1%, an advisor's fee is well within the industry average.
The rule is often used to point out that 80% of a company's revenue is generated by 20% of its customers. Viewed in this way, it might be advantageous for a company to focus on the 20% of clients that are responsible for 80% of revenues and market specifically to them.
What is an appropriate fee for a financial advisor? ›
Financial advisor fees
| Fee type | Typical cost |
|---|
| Assets under management (AUM) | 0.25% to 0.50% annually for a robo-advisor; 1% for a traditional in-person financial advisor. |
| Flat annual fee (retainer) | $2,000 to $7,500. |
| Hourly fee | $200 to $400. |
| Per-plan fee | $1,000 to $3,000. |
Apr 26, 2024
Whether you should consider working with more than one advisor can depend on your overall goals and financial situation. If you're fairly new to investing and you haven't built up a sizable net worth yet, for instance then one advisor may be sufficient to meet your needs.
Should I use a financial advisor or do it myself? ›
Those who use financial advisors typically get higher returns and more integrated planning, including tax management, retirement planning and estate planning. Self-investors, on the other hand, save on advisor fees and get the self-satisfaction of learning about investing and making their own decisions.
At what age should you hire a financial advisor? ›
But the benefits of meeting with a financial planner when you're young can make a difference. New graduates and people in their early careers should look for financial planning support as soon as they start earning an income, Hudnett Reiss tells CNBC Select.
How safe is your money with a financial advisor? ›
The Bottom Line
There is always going to be inherent risk in trusting your money with another person. Financial advisors are meant to take care of your money but it doesn't mean each and everyone will always have your best interest at heart.
Does a financial advisor have access to my bank account? ›
Regardless of whether they work for a bank or a financial planning firm, your financial advisor cannot access your account without your permission.
