Questions to Ask When Choosing an Adviser:

Questions to Ask

1. Fiduciary

“Will you accept fiduciary responsibility?”

fi•du•ci•ar•y – A financial advisor held to a Fiduciary Standard occupies a position of special trust and confidence when working with a client. As a Fiduciary, the financial advisor is required to act with undivided loyalty to the client.  This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.

Disclosure – People must know, and understand, how their financial advisor is being compensated for the advice they are providing and whether or not any conflicts exist that may cause a problem with that advisor’s ability to provide truly independent advice.  Without disclosure, can prudent advice be provided?

Typically, if your advisor is a broker and is compensated by commissions  they do not accept fiduciary responsibility.

GWM does accept fiduciary responsibility in the management of all client accounts.

2. Compensation

“How are you compensated for providing investment advice and will you disclose all the compensation you receive?”

If your advisor is compensated by a third party, i.e. brokerage firm, they are working for that company, not you. A registered representative is compensated by commission for the sale of packaged investment products. 

GWM does not receive any commissions for securities transactions.   Any and all charges are fully disclosed.

3. Surrender Charges

“If I am not satisfied with your services are there any costs if I move my money?”

If you buy a mutual fund or variable annuity that charges fees for early termination, you have just placed your money with an advisor that is compensated by commissions.  Registered investment advisors, such as GWM, fully disclosed any fees. There should be no exit fees (with the exception of minor fees charged by your custodian for account closing) charged by the advisor.

4. Experience

“How long have you been in business?”

There is no substitute for experience. An advisor should have been in business for at least 10 years, preferably 12 years. You want someone who has delivered good results for clients over time through both Bull and Bear market cycles. The current bear market has lasted more than ten years.

Stephen L. Gerritz, CFP, GWM Chief Investment Officer, has nearly 30 years experience helping clients achieve success in both bull and bear markets.

5. Background Check

“Has the advisor ever been disciplined for any unlawful or unethical actions?”

Have you ever been disciplined for any unlawful or unethical actions in your professional career? What government agencies and/or professional regulatory bodies (the State Securities Division, FINRA, the CFP Board, etc.) are you governed by? Contact these organizations to conduct a thorough background check.

Click on the AdvisorCheck logo below to verify that Stephen L. Gerritz, CFP, President of Gerritz Wealth Management, Inc. is in good standing with the Oregon Department of Consumer & Business Services Division of Finance and Corporate Securities.


   

6. Credentials

“What Credentials do you have?”

The term “financial advisor” is loosely used by many people in the industry. Ask the advisor what qualifies him to offer investment advice and whether he is recognized as a CERTIFIED FINANCIAL PLANNER™ professional or CFP® practitioner, a Certified Public Accountant/ Personal Financial Specialist (CPA/PFS), or a Chartered Financial Consultant (ChFC).

Stephen L. Gerritz, CFP is a Certified Financial Planner in good standing with the CFP Board.

The Certified Financial Planner (CFP) designation is a professional certification mark for financial planners conferred by the Certified Financial Planner Board of Standards, Inc. (CFP Board) in the United State and another 18 organizations affiliated with the Financial Planning Standards Board (FPSB) outside the United States.

To receive authorization to use the designation, the candidate must meet education, examination, experience and ethics requirements, and pay an ongoing certification fee.

To earn the CFP designation, candidates must meet several requirements—the first of which is the educational requirement, which requires candidates to have a bachelor’s degree or higher from an accredited U.S. college or university. CFP certification criteria require students to master a list of nearly 100 topics on integrated financial planning. The topics cover major planning areas such as general principle of finance, retirement planning, investment and securities management, etc.

7. Custodian

  “Will my money be deposited with a company/custodian that is safe, sound and insured?”

Your money should be deposited in a third party brokerage account that is regulated by the Securities and Exchange Commission (SEC). Cash and securities are protected by the Securities Investors Protection Corporation ( SIPC).  SIPC does not guarantee against loss from market fluctuations in the investments you own.

GWM does not take custody of client funds or securities. GWM recommends custodians that offer addition protection over and above the limits offered by SIPC. Click here to view current GWM recommended custodians.

8. Defense

“Do you have a strategy to protect my money from large declines in bear markets?”

Other than periodic rebalancing, most advisors do not have a risk management plan at all. Efforts to build in stability with asset allocation strategies failed investor during the 2007-2008 bear market.

First on our list at GWM is defense. Risk management is a major component of our active management style in any market, bull or bear.

9. Track Record

“Do you have proven strategies that deliver consistent results?”

Advisors generally manage accounts individually as opposed to managing money as a pool, like a mutual fund.   Due to this fact, many advisors will demonstrate the performance of their model portfolios rather than a composite return for all accounts under management.   The strategies demonstrated should be the exact models their clients are following in their accounts.

If they cannot adequately demonstrate the effectiveness of their strategy through both up and down market cycles, look for a different advisor.

The best evidence that your account will fare well in the years ahead is to evaluate how well the advisor’s approach faired during prior bull/ bear market cycles. You are looking for a long history of consistent performance with limited downside.

GWM uses investment strategies that adapt to markets as they change. These strategies have a great long-term proven track record.

10. References

“Can I speak with some of your clients that have been with you for some time?”

This is a situation where the advisor would be required to get permission from the client first.

GWM encourages willing current clients to talk openly and honestly to prospective clients.

 

To determine if and how we can help you, call Stephen at 800-877-1967 to setup an exploratory telephone meeting.

If you prefer, fill in your name, email address and telephone number and we will get in touch with you.

 You are under no obligation.

*(denotes required field)






Retirement Success in the New Economy

Are you retired or about to retire?

Big changes in the economic environment may have you wondering just how secure your future may be. Will you be able to sustain a comfortable life? Will your income keep up with inflation? Having a stable and a secure investment foundation is the key. Read More»

Free Offer!

  • Offer #1 Receive a subscription to The Gerritz Letter free of charge for a limited time. Investment guidance at its best
  • Offer #2 Also, receive a free email subscription to Gerritz InSights, our realtime market comments blog