How to Choose an Advisor
Every working day in your life is represented in the wealth you have accumulated. Look back at all of your hard work and forward with all of your goals and choose a wealth advisor today that meets your needs.
Our best advice is to find someone you trust.
We believe there are 4 criteria to evaluating an investment firm.
What is a registered investment advisory (RIA) firm?
An RIA acts in a fiduciary capacity. RIAs are required to file a Form ADV with the Securities and Exchange Commission and state securities authorities in the state or states they operate. Among the information Form ADV discloses is how the firm is compensated, the types of services provided and whether any disciplinary action was taken by securities against the firm.
Our View: Budd, Melone & Company is a Registered Investment Advisory firm.
What is the fiduciary standard?
There are 6 core Fiduciary Duties (Institute For The Fiduciary Standard)
- Serve the client’s best interest,
- Act in utmost good faith,
- Act prudently-with the care, skill, and judgment of a professional
- Avoid conflicts of interest,
- Disclose all material facts
- Control investment expenses
Our View: Budd, Melone & Company follows the 6 core fiduciary duties. We feel strongly about serving our clients in this manner. Our client’s have worked their entire lifetime and trust us with their wealth, we have no desire to work any other way with them.
Why shouldn’t I use a large firm? Don’t they have greater resources than a smaller firm?
Large or small, it is important to find a firm that fits your goals and objectives. Advances in technology and information have essentially leveled the playing field with regard to resources. Additionally, many large firms don’t adhere to the fiduciary standard and may have sales quotas regarding certain products or services.
Our View: We do not have sales quotas, push products or services to our clients they do not need or want.
Do I even need a firm? There are multiple online investment tools I can use myself.
We suggest that you do your due diligence when investigating online do it yourself investment platforms when comparing them to investment firms. Make a list of what they offer as opposed to working with a team of financial planners and wealth managers with years of experience.
Our View: At Budd, Melone and Company, we believe investment advisors are professionals who can bring more to you than an online service. If you use a doctor for your health needs, a lawyer for your legal issues, we believe you should seek a financial planner for your investment strategies.
Read this overview to learn how financial advisors are compensated.
What types of compensation models are there?
- Fee only: Asset-based, hourly or flat fees. Many financial advisors charge a percentage of the assets they manage in your portfolio. You may pay other fees for execution of the trades your advisor makes and for custody of your assets.
- Fee plus commissions: Some advisors may receive a portion of the commissions you pay when you buy or sell financial products your advisor recommends.
- Commissions only: Sales commissions on investments advisors buy or sell for you. This may give advisor incentive to recommend that you buy and sell more often.
- Wrap fees: A single asset-based fee for both the advice they provide and the execution of the trades they make.
Our View: Choose the model that best suits your goals and objectives.
What does the firm client relationship look like?
Understand the firm’s expectations for its clients and firmly establish your expectations regarding how you want to work with a firm.
Our View: When our clients join the firm, they have signed up to be on an ark. We call it 'the ark that will help you pursue financial independence'.
What is the investment approach and philosophy of the firm?
Discuss with the firm how they approach wealth management and financial planning. Alignment between your beliefs and the firm’s is critical to a relationship based on trust.
Our View: Our core philosophy is the behavior investment model. For more information on this approach click here.
What are the professional credentials of the team?
There is a virtual alphabet soup of credentials for advisors. A sampling includes:
Our View: Joe Budd is a CERTIFIED FINANCIAL PLANNER™ professional and Lou Melone is a CERTIFIED FINANCIAL PLANNER™ professional. CFP ® professionals have completed financial planning courses and passed a lengthy exam covering nearly 90 topics.
For more information on CFP ® certification, click here.
Who owns your firm?
Investors should be comfortable with the individuals who are driving the firm.
Our View: Budd, Melone & Company is owned by Joe Budd and Lou Melone. For more information click here.
What are 10 question to ask of a potential advisor?
The Certified Financial Planning Board has published ten questions to ask before establishing a relationship with a financial planner. Click here for the questions, what to listen for when an advisor answers, and how Budd, Melone & Company has responded to the questions.
What are 7 key traits your financial advisor should have?
The Certified Financial Planning Board has published seven key traits you should expect your financial planner to have. Click here to learn more about these traits.