Frequently Asked Questions
A: At Biltmore, we think it’s important for our clients to understand how a financial advisor makes money.
With so many potential conflicts of interests in the financial services industry, such as commissions and kickbacks from outside product and service providers, we believe these need to be separated. Many firms reward advisors with trips or vacations for putting certain products into client portfolios, give high commissions for selling certain investments, or encourage active trading of client accounts to generate more commissions. Not Biltmore.
We feel strongly that a client’s interests must be aligned with the success of their financial plan or investment strategy. For that reason, at Biltmore we believe it’s important that your advisor not receive these kinds of commissions or compensation; instead, we negotiate costs vigorously and pass the savings on to our clients.
Whether it be a mortgage, an investment fee or a margin loan rate, we insist that your financial advisor should have the freedom to shop the marketplace for the most flexible solutions at the lowest cost. That is why Biltmore prizes our independence as a financial firm.
A: An investment strategy should be defined in the context of a client’s overall financial plan. That plan ought to take into consideration such variables as savings, investment horizon, risk tolerance, mortgage expenses, future inheritances, and insurance costs, to name a few.
You can’t drive your car to a new destination without a map of where you’re going. How would you know what route to take? Like a map, a financial plan can help guide your investment strategy so you properly invest your assets. Once this planning is done, you’ll understand the correct level of risk and return you need to reach long term investment goals such as retirement.
A: This is a question we are asked frequently. The answer is different for everyone. Some clients may need to be able to walk into an advisor’s office, look them in the eye, and ask questions whenever they need to. But as technology continues to evolve, this is changing. We find that many clients are comfortable holding meetings via conference or video calls. Face-to-face meetings are important to establish trust at the beginning of a relationship, but we have found that a long-distance relationship can work well for clients of all ages and in all locations.
A: Service should be a top priority for a financial advisory firm. After all, they are investing your nest egg, which you have worked hard to build over a lifetime.
Firms should insist on speaking with clients monthly or quarterly to keep them in the loop about market events, progress towards goals, opportunities as they become available and more. You can negotiate this service level as part of your onboarding process, if an advisor isn’t forthcoming about it. You should not hire any advisor who isn’t going to be proactive about communicating with you; demand that as a foundation of your financial relationship.
A: With their promise of a guaranteed lifetime income stream, annuities can be an important component of retirement planning for some investors. But there are different types of annuities, with many different optional benefits, and they are certainly not appropriate for all investors.
Before you consider purchasing an annuity, we strongly suggest that you talk to a financial advisor to understand the expenses, fees, and surrender charges that you’ll pay if you have to get out of the contract. There could also be fees for additional features, such as a living benefit income rider or death benefit. It’s important to examine your current retirement savings in an employer 401(k) plan, IRA and other long-term investment vehicles to assess what role, if any, annuities should play in planning for a secure retirement.