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Moss to Forbes: Which Type of Advisor Is Best For You?

Financial advisors are not all the same. There are different types for different people. In this Forbes article, Wes Moss sketches out the variety of advisors and investing styles.

No matter if you have $1 million or $1,000 to invest, you still enjoy many options. Let’s look at some if you want help with investment planning in 2015:

 

In-person advisors. Generally, you meet with your financial advisor at least once a year to help you determine how to plan and organize your finances. He or she also helps you with investing: buying, selling and re-balancing your investments.

Broker-dealers buy and sell investments for clients and receive commissions as compensation. Registered investment advisors are in investment consulting, are registered either with the Securities and Exchange Commission or a state securities’ authorities, and may be paid via flat fees or commissions. Fee-only financial advisors (full disclosure: I am one) receive no commissions, trading fees or product reimbursements of any kind.

 

Digital advisors. A digital advisor works well if are interested in investing and want some professional guidance but aren’t ready for the high minimums most traditional advisors require.

Digital advisors are primarily online and typically work with you through, phone, email, text or video chat. Some such advisories, such as my firm’s new digital sister company Wela, use investment strategies we long implemented in-person with clients.

In addition to the advantages mentioned, digital advisors are also a good fit if you want to create a global view of all your finances and are sure you’ll be comfortable with your interactions being primarily online and mobile.

 

Robo advisors. Robo (as in “robot”)-advisors are a wonderful option if you want low-cost help investing, want to invest for the long term and don’t need help with other financial decisions.

These companies, similar to digital advisors in that they request that you invest either low or no-minimum amounts, are 100% online and offer little to no human interaction. They aim to charge even less than digital advisors, typically 0.25% to 0.35% of your assets under management each year.

Both digital and robo advisors keep all operations digital, facilitating such low fees. The typical process to open an investment account involves you logging on to the site and filling in a questionnaire on your investment tolerances. You then receive suggestions based on the online advisor’s algorithms.

 

Read the original article as it appears in Forbes.


 

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