Broker Check
The Evolving Advisor

The Evolving Advisor

October 20, 2023

The investing community is evolving. Investors are becoming more curious and informed, and because of this, they need more transparency from their advisors on costs and investment selections.

Not long ago, many advisors worked on sales commissions alone. High levels of conflict can arise from operating on a commission basis, but now the industry is shifting to newer opportunities that prioritize clients’ interests. Fee-based accounts tend to be fairer in the way that clients are charged because fees are based on the amount of work that the advisor does. As a fee-based account, the advisor gets paid a percentage of your total account value. For example, if your advisor’s fee is 1.0% per year and you have an account worth $500,000, you’ll pay your advisor $5,000 per year. So, as your account grows, and you accumulate wealth over time, your advisor’s compensation can also grow. This is beneficial to you, because it means that the more money they make you, the more they’re incentivized.

The more services an advisor offers to their clients, the higher their fee may be. However, creating added value on top of investment returns is where many advisors set themselves apart. Added services that your advisor should be offering are in-depth financial planning, tax strategies, estate planning guidance, business succession planning, college funding, insurance analysis, and much more.

Larger firms and older advisors are sometimes unaware or even ignorant of the benefits of offering fee-based services. They don’t realize the value of holding themselves to the fiduciary standard and acting in their clients’ best interests. At Olistico Wealth, we are a Registered Investment Advisory firm (RIA). This means that we are fiduciaries and we’re legally required to put our clients’ interests ahead of our own.

In addition to their new understanding and appreciation of fee-based accounts, investors are becoming more aware of the benefits of a disciplined and longer-term investment approach. A speculative, shorter-term approach to investing often does not achieve investors' goals and accumulates transaction fees. A long-term approach takes advantage of the historical upward trends of the market, and it helps mitigate the emotional burden of the short-term market movements.

By working with an advisor who understands your goals, investing knowledge, and your emotional characteristics, they can help you create an investment approach that you feel comfortable staying the course with through market upturns and market downturns (both of which will occur). This has been made abundantly clear over the past three years. Despite the effects of Covid, meme stocks, cryptocurrency, geopolitical uncertainty, and inflation, the market has still trended upward since 2020

We will guide you to an investment approach that suits your circumstances and is based on proven principles. Then, when the market shifts (and it will), we will help you remember the foundation of the plan we helped you create and remind you to stay the course. If a scenario arises in which changes need to be made, you can be assured that we will do what is best for you and your plan.

Remember to choose an advisor that you trust, and one that trusts the market. If you understand and believe in the proven principles of investing for the long-term, you owe it to yourself to find an advisor who does too.