ASK THE MONEY LADY

nated my job after 38 years. I plan to find an Advisor, but because I have never had one before I am wondering what I should pay for their services, Ed.

Ed, you are not the only one looking around for a new investment advisor. With the volatile stock market environment, many people have sent me comments and questions about how to move their portfolios to a new advisor.

I would caution those investors on making any quick changes and selling stock at this time. Remember, the key is to maintain a well-diversified portfolio which includes bonds, cash, and high-quality stocks.

When you are looking for an investment “partner,” try to pick an advisor who really has your best interests at heart; someone you will definitely need when weathering future market uncertainties.

Please make sure to do your homework and find out what the firm and the new advisor’s value proposition is. It goes without saying that you should interview more than one and make sure you find a good fit with not only the advisor but also the brokerage firm. Now let’s talk about fees. What should you pay?

There are two types of fee structures – transactional or fee-based.

Transactional fees are charged with every investment transaction. This is often the case when you buy fixedincome investments such as bonds. A fee is charged when you purchase the bond and then again when you sell it.

There are not many advisors that still offer transactional fee structures when buying securities. They seem to have left the industry with the vintage oldschool stockbrokers who had to do multi - ple trades every month to make any money. A method we used to call “pump & dump” back in the day.

Now we have investment advisors that want to put you in fee-based plans, designed to offer more protection for clients along with a consistent revenue stream for the advisor and brokerage firm.

At the retail level, many financial planners are paid a base salary with a commission matrix based on how they grow their book of business and bring on new clients.

Typically, fees are preset and based on the mutual fund you choose ranging from 1 per cent to 2.95 per cent.