Know the Questions to Ask
We have compiled a list of questions we have heard from Clients over the years along with questions from a variety of sources that we feel would be helpful for you - documented for your review. Why so much? We believe in sharing more than the bare minimum. When it comes to guiding your money and your future, we believe its important to "OverShare". There is certainly more for us to discuss and this will helps us get a running start.
Are you registered with our state securities regulator? Have you ever been disciplined by the SEC, a state regulator, or other organization (such as FINRA) or one of the stock exchanges?
How long has your firm been in business? How many arbitration awards have been filed against your firm?
What training and experience do you have? How long have you been in the business? What other firms have you been registered with? What is the status of those firms today?
Have you personally been involved in any arbitration cases? What happened?
What is your investment philosophy?
Can you describe the type of clients you work with and how you help them?
How do you get paid? By commission? By the amount of assets
you manage? By another method?
Do I have any choices on how to pay you? Should I pay you by the transaction? Or a flat fee regardless of how many transactions I have?
Do you make more if I buy this stock, bond, mutual fund, or ETF,
rather than another? If you weren’t making extra money, would your
recommendation be the same?
Are you participating in a sales contest? Is this purchase really in my best interest?
You’ve told me what it costs me to buy this stock, bond, mutual fund, or ETF; how much will I receive if I sell it today?
Where do you send my order to be executed? Can we get a better price if we send it to another market?
If your broker changes firms, ask: Did they pay you to change firms?
Do you get anything for bringing me along?
Many successful investors follow this rule of thumb: Never invest in something you don’t understand. Be sure to always read an investment’s prospectus or disclosure statement carefully. If you can’t understand the investment and how it will help you make money, ask a trusted financial professional for help. If you are still confused, you should think twice about investing.
OverShare Advice and Planning, LLC operates as a Fee-only Registered Investment Advisor.
Our fees for Financial Planning are always quoted ahead of time and you have the opportunity to review before agreeing to move forward with working together. The cost for a financial planning engagement ranges from $2500 to $10,000 and the engagement typically requires working closely together for 90-120 days or so with a full 12 months of availability to your financial planner. You can see a full list of financial planning fees in our ADV Brochure - Click Here.
After your financial planning details are in place and we understand how best to build your investment portfolios, you have the choice to hire OverShare Advice and Planning, LLC to manage your investment accounts (joint accounts, trust accounts, Individual Retirement Accounts IRAs, education account, business accounts, etc.). We have selected TD Ameritrade Institutional for our custodian and that is where all your accounts we manage for you will be held and all reports and statements will be mailed or available through TD Ameritrade Institutional.
Investment Advisory fees are based on a schedule of blended tiers with the following schedule (see the ADV Brochure for a complete description of advisory fees)
Advisory Account Values – Assets Under Management
Below $500,000 1.40%
$500,001 - $1,000,000 1.20%
$1,000,001 - $2,000,000 0.99%
$2,000,001 - $5,000,000 0.90%
$5,000,001 - $10,000,000 0.80%
$10,000,001 - $25,000,000 0.70%
$25,000,001 and Above 0.60%
The investment strategies held insider you accounts may have underlying fees, expenses and costs for mutual funds, exchange traded funds, separate account managers, private investments, etc. See the question "What about investment expenses I can't see very easily?"
Financial Planners and Financial Advisors (whatever you call the person helping to manage your portfolio) should be critical and suspicious when considering fees, costs and expenses. Specifically, we take a hard look at things that could be a burden for your investment account and there can be unnecessary expenses that can be reduced or eliminated. We define "unnecessary expenses" as the fees, costs, expenses that do not add discernible value or are expected to add value over time.
As with anything you buy, there are fees and costs associated with investment products and services. These fees may seem small, but over time they can have a major impact on your investment portfolio. Understanding the fees you pay is important to investing wisely.
The best advice we can give you about understanding fees and investing wisely is to ask questions. For example:
- What are the total fees to purchase, maintain, and sell this investment?
- Are there ways that I can reduce or avoid some of the fees I’ll pay, such as by purchasing the investment directly?
- How much does this investment have to increase in value before I break even?
- What are the ongoing fees to maintain my account?
- For mutual funds: How much will the fund charge me when I buy and/or sell shares?
- For the investment professional: How do you get paid? By commission? By the amount of assets you manage? By another method? Do I have any choice on how to pay you? Should I pay you by the transaction, or pay a flat fee regardless of how many transactions I have?
Visit Investor.gov special section on understanding fees to learn more - Click Here.
Whether checking out an investment professional, researching an investment, or learning about new products or scams, unbiased information can be a great advantage when it comes to investing wisely. Make a habit of using the information and tools on securities regulators’ websites. If you have a question or concern about an investment, please contact the SEC, FINRA, or your state securities regulator for help.
Does this investment match my investment goals? Why is this
investment suitable for me?
How will this investment make money? (dividends? interest? capital gains?)
What could cause this investment to increase or decrease in value? (for example, changes in interest rates, real estate values, or market share?)
What are the total fees to purchase, maintain, and sell this investment?
Are there ways that I can reduce or avoid some of the fees that I’ll pay, such as purchasing the investment directly? After all the fees are paid, how much does this investment have to increase in value before I break even?
How liquid is this investment? How easy would it be to sell if I needed my money right away?
What are the specific risks associated with this investment? What is the maximum I could lose? (for example, what will be the effect of changing interest rates, economic recession, high competition, or stock market ups
How long has the company been in business? Is its management
experienced? Has management been successful in the past? Have they ever made money for investors before?
Is the company making money? How are they doing compared to
Where can I get more information about this investment? Can I get the latest reports filed by the company with the SEC: a prospectus or offering circular, or the latest annual report and financial statements?
Questions for Mutual Funds and Exchange Traded Funds (ETFs)
How has this fund performed over the long run? Where can I find an independent evaluation of this fund?
What specific risks are associated with this fund?
What type of securities does the fund hold? How often does the portfolio change?
Does this fund invest in any type of securities that could cause the value to go up or down rapidly in a short period of time? (for example, derivatives?)
How does the fund perform compared to other funds of the same type or to an index of the same type of investment?
How much will the fund charge me when I buy shares? What ongoing fees are charged? How much will the fund charge me when I sell shares?
Is the fund portable? If I move my assets to another firm, will I be able to continue holding the fund or will I need to liquidate it?
Research shows that con-artists are experts at the art of persuasion, often using a variety of influence tactics tailored to the vulnerabilities of their victims. Smart investors check the background of anyone promoting an investment opportunity, even before learning about opportunity itself.
- Researching brokers: Details on a broker’s background and qualifications are available for free on FINRA’s BrokerCheck website.
- Researching investment advisers: The Investment Adviser Public Disclosure website provides information about investment adviser firms registered with the SEC and most state-registered investment adviser firms.
- Researching SEC actions: The SEC Action Lookup - Individuals allows you to look up information about certain individuals who have been named as defendants in SEC federal court actions or respondents in SEC administrative proceedings.
If you are not sure who to contact or have any questions regarding checking the background of an investment professional, call the SEC’s toll-free investor assistance line at (800) 732-0330.
Any offer or sale of securities must be registered with the SEC or exempt from registration. Registration is important because it provides investors with access to key information about the company's management, products, services, and finances.
Smart investors always check whether an investment is registered with the SEC by using the SEC’s EDGAR database or contacting the SEC’s toll-free investor assistance line at (800) 732-0330.
Brokers and investment advisers offer a variety of services at a variety of prices. It pays to comparison shop.
You can get recommendations from most financial institutions that sell investments, including brokerages, banks, mutual fund companies, and insurance companies. You can also hire a broker, an investment adviser, an accountant, or a financial planner to help you make investment decisions.
There are difference between the level of scrutiny a broker is required to conduct as part of a recommendation and what we believe is a higher standard that mus be followed by and investment adviser when providing advice and operating in a fiduciary capacity. OverShare Advice and Planning, LLC is a registered investment adviser that is registered with the State of Texas and delivers on the fiduciary standard of care.
Cost to Hire a Professional
There is no such thing as a free lunch. Investment advisers and brokers (along with insurance agents, accounts, bankers, and anyone recommending a course of action with your money) perform their services at a cost or underlying expenses (the ones you don't see very easily) or stated fees. If they are working for you, they are getting paid for their efforts. Some of their fees are easier to see immediately than are others. But, in all cases, you should always feel free to ask questions about how and how much your adviser is being paid. And if the fee is quoted to you as a percentage, make sure that you understand what that translates to in dollars. Be sure to ask about the fees that the financial professional gets paid along with other fees that may go their home office or corporate office or other related investment manager or insurance company.
Check out your Investment Professional
Choosing whether to work with a professional – and deciding which type is best for you – is a very important decision. The most important question that you should consider before hiring an investment professional is whether the person is registered with us or with a state securities regulator. It is really risky to invest with someone who isn’t licensed and we urge you not to do it. Investor.gov has a free and simple search tool that allows you to find out if your investment professional is licensed and registered.
If a broker or adviser has initials after his name, don’t assume that makes that individual better qualified than another. These titles are not all the same and do not necessarily mean better service for you. In fact, the initials may mean that the adviser or broker can only sell certain products. Check the titles to see if there are limits on what that adviser or broker can sell. For instance, if someone can only sell fixed annuities, he or she may be inclined to recommend them for every customer.
Check out this list from FINRA. It shows how some credentials can be obtained easily, and how others are hard-earned.
Must Read Tip
If you have a brokerage account, read your statement every month -- it may not be fun to look at it when the market is down, but it is your most important protection against unauthorized transactions. If you do not object in writing within ten days of receiving notification of a transaction, you might not be able to contest it later. That’s why it’s important to read your statement and object right away if something is wrong.
You can review Form ADV (Part 2 Brochure) for OverShare Advice and Planning, LLC by Clicking Here and visiting the SEC.gov website.
Form ADV is the uniform form used by investment advisers to register with both the Securities and Exchange Commission (SEC) and state securities authorities. The form consists of two parts. Part 1 requires information about the investment adviser’s business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees. Part 1 is organized in a check-the-box, fill-in-the-blank format. The SEC reviews the information from this part of the form to process registrations and manage its regulatory and examination programs. Although designed for a regulatory purpose, investment adviser filings of Part 1 are available to the public on the SEC’s Investment Adviser Public Disclosure (IAPD) website at www.adviserinfo.sec.gov.
Beginning in 2011, Part 2 requires investment advisers to prepare narrative brochures written in plain English that contain information such as the types of advisory services offered, the adviser’s fee schedule, disciplinary information, conflicts of interest, and the educational and business background of management and key advisory personnel of the adviser. The brochure is the primary disclosure document that investment advisers provide to their clients. When filed, the brochures are available to the public on the IAPD website.
The potential for greater returns comes with greater risk. Understanding this crucial trade-off between risk and reward can help you separate legitimate opportunities from unlawful schemes.
Investments with greater risk may offer higher potential returns, but they may expose you to greater investment losses. Keep in mind every investment carries some degree of risk and no legitimate investment offers the best of both worlds.
Many investment frauds are pitched as high return opportunities with little or no risk. Ignore these so-called opportunities or, better yet, report them to the SEC.
How frequently do I get statements? Do I understand what the
statement tells me?
Is the return on my investment meeting my expectations and goals? Is this investment performing as I was led to believe?
How much money will I get back if I sell my investment today?
How much am I paying in commission or fees?
Have my goals changed? If so, are my investments still suitable?
What criteria will I use to decide when to sell?
Act promptly! By law, you only have a limited time to take legal action.
Follow these steps to solve your problem:
1. Talk to your investment professional and explain the problem. Where is the fault? Were communications clear? What did the investment professional tell you?
2. If your investment professional can’t resolve your problem, then
talk to the investment professional’s supervisor (which, for brokers, is often the firm’s branch manager).
3. If the problem is still not resolved, write to the compliance department at the firm’s main office. Explain your problem clearly, and how you want it resolved. Ask the compliance office to respond to you within 30 days. If you’re still not satisfied:
Send a copy of your letter to your states securities administrator or
to the Office of Investor Education and Advocacy at the Securities and Exchange Commission (SEC). At the SEC, they will review your complaint, contact the firm or person you have complained about and ask them to respond to your specific complaint or question.
Sometimes their intervention yields a satisfactory result. If these steps
don’t work, you may need to take legal action on your own. They can
send you information on mediation and arbitration, and suggest how to
locate a lawyer if you need one.
U.S. Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, NE
Washington, DC 20549-0213
Telephone: (800) 732-0330 (toll-free)
Ask a question or report a problem concerning your investments, investment account, or an investment professional:
Report a possible securities fraud: