What is fiduciary, fee-only, and evidence based?
- Is your advisor a fiduciary?
Fiduciary advisors are required by law to act only in your best interest, even above their own. This is in stark contrast to the standards of most broker/advisors, who only need to meet a “suitability” threshold, which basically means anything goes.
- Is your advisor fee-only?
Fee-only advisors are compensated only by you, the client. If your advisor is also compensated by third parties, you have to wonder if they truly are committed to your best interest. For example, could your advisor be recommending a certain mutual fund or annuity because he or she gets a commission, sales charge (load), or another form of compensation for selling that product? If they are fee-only, then they are only compensated directly by you–never by commissions–minimizing potential conflicts of interest.
- Is your advisor’s approach to investing evidence based?
We know from decades of research, Nobel Prize-winning ideas, and real-world observations that trying to forecast or beat the markets is futile. The best approach to investing is proven to be with discipline using low-cost, globally diversified portfolios of index funds. Does your advisor use low-cost index funds? If not, then why not? What are the reasons that your advisor is using to pick stocks, mutual funds, and other financial products in your portfolio? Demand data that support the claims, specifically how your portfolio has performed against the underlying indices, net of all fees. Don’t be fooled by comparisons of your account to just any index; make sure it’s an index that tracks the same asset classes. And make sure that the comparison is for your account over a length of time, not just over a selected time frame. These data should be easily generated by your advisor and clearly presented.
Do you even need an advisor?
Are we the right investment management advisor for you?
What metrics do you use by which to pick stocks?
Can you hold individual stocks in your portfolio?
What are your services?
We advise clients to also rely on financial planners, fee-only insurance advisors, and tax accountants in collaboration with our services. If you need help seeking out reputable service providers, we can make recommendations.
What are Sabela's investment management fees?
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Our initial account minimum investment is $100,000. We treat each client independently and may in some cases waive the initial minimum investment requirement. Solely at our discretion, in some cases the fees may be negotiable.