Should I Use the Financial Adviser Through My Bank?

investing through bank financial services
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Many banks offer the option to use their financial advisers for your investments. They may offer incentives such as lower fee transactions or free checking if you have an investment account at the bank.

Generally, there is a minimum amount that they want you to continue to have invested through them to maintain the services. You may want to work with your bank because already have a relationship with them. However, it is important to make sure your bank's investment services are the right fit for you.

What Are the Advantages of Working With My Bank?

People will choose to use their bank because they feel that the financial adviser is more trustworthy or because it simplifies the process of looking for a financial adviser. It is important to consider the way that the financial adviser is paid. A person that is paid entirely on commission may be more likely to suggest products that do not fall directly in line with your investment comfort level.

A financial adviser that works for a bank will likely be able to offer you a wide variety of investments as well as life insurance options. The brokerage fees should be comparable to other financial advisers that work specifically for a brokerage house or independently. It can be reassuring to have a reliable company and name when you are thinking about investing.

It can be nice to continue to work with a business where you already have an account established. You should find out what happens if you need to change banks because you move or for a similar reason. You may want to be able to leave your investments at the bank even if you do not have an account with them. Consider the following:

  • The products and services offered through your bank may be right for you.
  • Some financial advisers will offer more than just investing services and can also help with life insurance and business planning needs. Determine what you want and need and then look for a good match.
  • Interview the adviser that you will be working with to see if you are a good match.
  • Look at the fees that the bank charges based on trades, meetings, and services.

How Do I Find a Financial Adviser?

As you look for a financial adviser, you need to consider all of your options and not just choose the one that is most convenient. Ask around. Don't be afraid to ask for referrals from other clients, this will let you know that the financial adviser is competent and reliable. You should also interview several and make sure that your financial adviser can explain the investment options to you and then will let you make the choice.

A good financial adviser will listen to your goals, and understand the amount of risk you are willing to take and then be able to find products that match those goals. They should be able to help you with creating a financial plan. Additionally, they should be able to explain the risks and benefits of each investment option and explain the way that you should spread your investments out over several options and in different risk categories to protect yourself. If they can't do this, you should find a new financial adviser. Try the following approach:

  • Take the time to interview several different advisers before you make your final choice.
  • Ask for referrals from people you trust.
  • Ask the adviser if they have clients who would be willing to talk to you about them.
  • Make sure you understand how the relationship will work and how often you will meet to review your portfolio and how recommendations on purchasing new investments will be handled.

Is My Money Protected?

Finally, it is important to realize that if you do choose to go with a financial advisor through your bank that the FDIC does not insure the funds that are in investment accounts. It is a common misconception, but your funds are no safer investing through your bank’s brokerage department than they are using an online brokerage firm. That is why you should consider all options such as fees, and compatibility before making a choice.

Although there is risk involved with investing, it is one of the best ways that you can begin to build wealth. As you invest, it is important to remember that the markets may go up and down. The money is earned the best by weathering the low times and leaving your money in the market. A financial adviser can help you understand the market. It can help you stay calm when the market drops and help you make better financial decisions.

Unless you have seriously studied the stock market getting help from a professional is one of the best ways you can begin investing money. There are classes you can take and ways to learn about investments, and it is important to educate yourself as much as possible on investing your money.

You may want to start by using a financial planner or investment adviser and then begin making investments on your own once you understand the markets more. In that case, try this approach:

  • Take the time to study the market through reading about it or by taking classes.
  • Understand that the market will fluctuate and try not to panic if things drop down.
  • Talk to your adviser about how aggressive you want to be with your investments and what amount you want invested in more conservative funds.
  • Remember that your investment strategy will change as you get older.