Washington State Financial Advisor Requirements

A financial advisor Seattle must meet minimum state and federal laws. Located on Seattle’s Eastside in Bellevue, Winvest is made for performance.

Investment advisor firms must have certain basic requirements met. Firms managing less than $100 million in assets under management must register at the state-level, with the Washington Department of Financial Institutions. If the investment advisor manages more than $100 million in assets, it must register, under federal law, with the Securities and Exchange Commission.

Investment advisors come from very diverse business backgrounds, and some may hold different industry designations, while others, none at all. The world’s most famed and wealthiest investment manager holds no industry designations, Warren Edward Buffett, CEO of Berkshire Hathaway Inc.

One great tool for checking the registration of investment firms is Finra’s BrokerCheck, use it here.

Good Questions to Ask Your Financial Advisor Seattle

How many years have you been an investment manager?

Having a few years of market-beating, or benchmark-equivalent investment returns should provide clear evidence of the degree of an investment manager’s skill. If an investment advisor cannot match standard benchmark performance, it means the investor is better-off investing in an index fund. They would have created more wealth just by being a passive investor, this is excluding fee considerations.

What are all of the expenses I will pay to have you to be my investment manager?

When prospecting potential financial advisors, it’s not always clear how much their fees will be up front. The structure of their fees can have a large impact on your finances. It’s important to understand what, when, and how fees are paid.

A management fee, whether it is a mutual fund expense ratio fee or a fee paid to a financial advisor, may vary between .10%, to roughly 3%. Generally, the range in the fee is due to differing strategies. For example, more aggressive-oriented investment portfolios tend to have higher management fees because there is more work required, or the portfolio delivers superior investment returns.

The flat management fee is probably the simplest to understand. This type of fee means there is one stated fee regardless of the investor’s investment selection. Sometimes investment managers may lower this fee if certain asset thresholds are met. For example, if an asset manager generally charges a 1.5% flat fee, they may only charge 1% or less for managing portfolios greater than one million dollars.

How do you benefit from the stock recommendations you make?

Sometimes financial advisors earn commissions based on the products that they sell. This can lead to a dangerous conflict of interest situation. A situation whereby it is in the very best interest of the advisor to sell products that may or may not be in the best interest of the investor.

You may want your financial advisor not incentivized by sales commissions. Additionally, you may want your investment advisor invested in the same stocks that he/she is recommending you buy. If they are owning one stock, but recommending you another, it’s important you ask the reasons they don’t want the stock they are recommending to you.

Determining Your Needs And Preferences

The needs of every person and family is different, and their needs also change over time. Someone who owns a small but growing business may have an interest in reallocating their growing wealth into new asset classes. Or perhaps they finally qualify to invest in hedge funds because they now have accredited-investor-status. Determining your orientations are important and a high-quality investment advisor can assist you with that.

Asking About Fees

Investment management fees can vary greatly depending on the type of management sought, and the institution.

Investors should examine an investment manager’s performance. Three to five years of investment returns or more will help to determine the investment managers’ performance under various market conditions. 

please click here to learn more about Winvest’s fees.

Asking About Important Policies For a Financial Advisor Seattle

There are certain important policies the investor should be aware of when shopping for an investment manager. The fund redemption policy is one such policy that deserves special attention. It is the policy of when and under what conditions an investor may redeem some defined amount of their portfolio. This policy is only relevant if the investment manager manages assets through a fund, as opposed to separately managed accounts.

Non-fund-based investment managers may also have different policies about redemptions and withdrawals. These are important questions to ask the advisor.

What Type of Investment Manager is Right For You?

Robo-advisors utilize basic financial knowledge and technology to advise individuals about their money and investments to create automated investment management on behalf of everyday investors.

Reviews indicate no superiority in making good investment decisions compared to human intelligence. The robo-advisor, however, may offer other benefits in savings from fees compared to human advisors. These are considerations that should be thought-through when contemplating an automated investment advisor.

Hedge funds are a special type of financial advisor and typically only advise accredited investors. Hedge funds serve the premium end of the investment management market. Its investors are typically individuals with brokerage assets greater than one million dollars. Another qualification method is if the investor has earned $200,000 in previous two years.

Click here to learn more about hedge funds and if they are right for you.

Was there info you didn’t find? Was there a subtopic you wanted more of? Comment for an article update.