What is a financial advisor?
A financial advisor is a professional who engages in introducing and educating clients about wealth, investing, and other types of money matters, and sometimes managing these financial matters. This is an umbrella term that includes stockbrokers, financial planners, investment advisors, tax preparers, bankers, insurance agents, and estate planners.
In January 2021, the average salary for a financial advisor in the US was $59,708, with most salaries between $38,000 and $109,000, according to the salary information site PayScale. In addition to salary, financial advisors also receive bonuses, profit sharing, and commissions.
The average year-end bonus for a financial advisor ranges from $2,000 to $31,000. The average annual profit-sharing compensation ranges from $995 to $18,000. The average annual commission pay ranges from $4,000 to $182,000. The average total compensation for financial advisors ranges from $39,000 to $139,000.
experience is worth it
Financial advisor salaries also vary based on experience. On average, late-career financial advisors earn 32 percent above average, experienced advisors are 38 percent above average, mid-career advisors earn 15 percent above average, and junior advisors earn less than 18 percent on average.
Financial advisors with investment management skills earn 6% more than the average. Those with investment planning skills earned 3% more than average, while advisors with portfolio management skills earned 2% more than average. Those who knew the financial model earned 4% more than average the average.
Some financial advisors also receive compensation in the form of health benefits. 75% of financial advisors receive medical benefits, 60% receive dental benefits, 52% receive vision benefits, and only 24% receive no health benefits.
Some things to know before meeting with a financial advisor
Changes in financial situations are common.
These fluctuations can affect your savings and investment goals, whether within or outside of your control. That’s why it’s a good habit to revisit your budget and financial goals every few months or after a major economic event. For many people, discussing with a financial advisor to better understand their current financial situation and to assess or reassess short- and long-term goals can help in deciding how to take further action.
When you schedule your next meeting with your financial advisor, the following preparations will help you maximize the outcome of your meeting.
Organize and review your financial documents before meeting with a financial advisor
It’s a good idea to have the relevant financial documents sorted out before your appointment with your financial advisor, and according to Alex Hebert-Ben Dhaou, a TD Financial Advisor based in Montreal, Quebec, taking the time to review these documents and the status of your investments before your appointment is also a good idea. Very useful.
If applicable to you and your situation, you can prepare documentation for each account and bring it with you to your next meeting with your financial advisor.
Some of the documents you can organize and bring with you include:
- personal tax information
- Home Loan Documents
- Medical and/or Insurance Group Benefits
- Mutual Fund Documents
- TFSA and/or RRSP documents
- RESP file
- policy
- A copy of your household budget (if available)
Prepare a list of questions to ask a financial advisor
In most cases, the financial advisor will lead the meeting and ask questions to better understand your current needs and personal goals, but it’s also important to bring a list of questions you want them to answer.
Here are some questions you might consider asking based on your situation:
- Is my current investment strategy still aligned with my personal goals?
- Which type of investment product is suitable for my objectives, investment horizon, investment knowledge, and risk appetite?
- What events of the year should I be aware of when it comes to marketing activities?
- Based on my budget and monthly spending, how much emergency funds should I keep?
- What information do I need to know now if I am considering buying or selling real estate?
Remember, there are no stupid questions.
Be open to reassessing your financial goals and plans
While you may think your current financial plan is appropriate, it’s also important to be open to the fact that you may need to change your plan as the market and your financial situation change. A flexible mindset and speaking up with your financial advisor can help ensure that your current and long-term financial concerns can be addressed by developing a financial plan that is tailored to your particular situation.
