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Should You Use a Financial Advisor Affiliated with Your Bank?

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The future holds many surprises. Therefore, it can get a little challenging to create a financial strategy in order to fulfill your investment objectives in the long run. Also, managing your funds on your own might require a lot of time and effort on your part. Using the services of a financial advisor can help you manage your funds efficiently. Mostly, people go to a financial advisor to help with tax planning or retirement planning, but the professionals can also help with other financial concerns such as estate planning, saving for education, and insurance. It may be wise to enlist the services of financial advisors for guidance since they are well-trained and certified in specific fields of finance and have better knowledge and expertise in financial markets, taxes, and other legal regulations. If you need further assistance in managing your finances, consult a financial advisors for investing and financial planning strategies.

Of course, all these services come at a cost. The fee structure of financial advisors can vary vastly. Some advisors may charge a percentage-based fee wherein the percentage depends on the value of assets they manage. Others may charge upfront or back-end commissions, an hourly rate, work on a retainer basis or charge just a standard fee. Make sure that you are clear about the fees charged by financial advisors before you hire one.

Do banks offer the services of a financial advisor?

Several banks have investment divisions that provide the option of using their financial advisors to grow and manage your wealth. The banks might even offer incentives on the services provided by their financial advisors, such as low fees or free checking if you have an investment account at the bank. People tend to choose their banks for financial advisory services since they are already acquainted with the bank and thus may find the bank's financial advisor more trustworthy. Also, it is simpler for them to opt for the bank's financial advisor rather than go around looking for one.

A bank-appointed advisor will usually be able to provide the client with a variety of investment instruments as well as insurance options. The brokerage fees offered should be comparable to those offered by advisors from independent firms and brokerage houses. It is always reassuring to have a financial advisor from a reputed company while thinking about investing. That said, belonging to your bank is not a guarantee that the financial advisor will be able to generate returns for you. Although it is always good to maintain an established relationship with your bank, you should still check up on what the other players in the market are offering and their cost structures too. Additionally, you may also want to look into the details if you decide to change the bank because you might want to leave your investments with them even when you do not have an account, or vice-versa - switch your investments to another advisor while retaining your banking services with your bank.

Difference between investment bankers and financial advisors

Financial advisors provide services that help an individual to create, grow and manage their wealth. They lead the individual through various investment avenues available (including those formed internally as well as those overseen by external asset managers) in the market and create a financial plan according to the goals and risk tolerance of the individual. They use their knowledge and expertise about the financial markets to improve the performance of the individual’s portfolio. Financial advisors may be independent registered investment advisors (RIAs), or be associated with an investment firm, or be employed by a bank as part of the value-added services (separately chargeable) the bank offers to its clients.

Note that investment bankers and financial advisors associated with banks are not the same! Investment banks provide their services to financial institutions or independent firms. They provide numerous services, right from restructuring support to mergers and acquisition procedures. Generally, bankers are best known for underwriting IPOs (Initial Public Offering) for companies up for public listings.

What should I consider when choosing a financial advisor from my bank?

You should weigh the services offered by your bank's advisor the same way that you would for any other financial advisor. Seek out their certifications and do a thorough background check. Interview them to see if they are on the same wavelength as you and if you are comfortable discussing money matters with them.

Just because you have had a good relationship with your bank also does not mean you should turn a blind eye to other financial advisors available in the market. Performing a cost-benefit analysis may help you narrow down your choices. Following are some of the factors that you may consider for choosing a financial advisor.

  1. First, determine exactly what you need from the financial advisor. Some advisors offer just investing services, while others might add life insurance and business planning support as well. Thus, decide on what you require and find an advisor accordingly.

  2. Do not hesitate to ask all kinds of questions to the financial advisor before selecting them; that way, you will know if they are a good fit for you.

  3. Check the fee structure charged by the bank based on meetings, trades, and services. Will the costs be auto-deducted from your bank balance? What is the commission the bank charges? Are there any other hidden fees like the cost of receiving reports or subscription to their premium services newsletter?

  4. Look at how the financial advisor is being paid. If the advisor is paid on a commission-only model, then it is highly likely that they may suggest expensive or unsuitable investment products to achieve their personal sales targets.

  5. You should be aware of how their client relationship will work if you frequently meet to review the portfolio's performance. Seek out information on how they will give recommendations on new investment products and what methodology they will follow.

How do I find a financial advisor suitable for my financial needs and goals?

Do not choose your bank’s financial advisor just because it is more convenient. Scout across different brokerages and companies to find a financial advisor who is best for you. Compare the services and costs of other advisors with the bank’s advisor. In addition, ask other clients who have been with the bank about the quality of the services and whether the financial advisor is competent and reliable. You must also speak with the financial advisor and interview him and ensure that he is able to explain different investment options properly and let you make the final choice. An advisor who listens to your investment objectives and long-term financial goals and understands the degree of risk you are willing to take is a good financial advisor. They should be able to come up with a financial plan according to the above-mentioned factors. In addition, they should explain the benefits and risks associated with each investment option and advise you on how you can diversify your fund in different investments to minimize your risk. If you find that the advisor cannot perform any of these functions, you may consider changing your advisor.

Are my investments safe with my bank’s financial advisor?

In the end, every investor seeks the safety of capital, irrespective of whom they engage with for making their financial decisions. Should you opt for your bank's financial advisor, you need to know that the FDIC - the Federal Deposit Insurance Corporation - does not insure funds that are under investment accounts. People often believe that their funds are safer since they are investing through their bank's brokerage department, but in reality, your funds are no safer than using an online brokerage firm. Therefore, it is important that investors are prudent while choosing their financial advisor, and that they consider all options before finalizing on one.

While these are the popular choices due to the sheer size of the assets under management (AUM), which gives a false sense of assurance in the capability of the bank to manage your funds, we circle back to the importance of doing your research before signing up for advisory services. There are many RIAs and fiduciary financial advisors not associated with banks who may be able to achieve solid, measurable results for your investments.


Even though there is a level of risk involved in investing, it is still one of the best ways to increase your wealth over time. It is important to remember that markets are volatile. A financial advisor can guide you in making better financial decisions by explaining the market dynamics and the different investment tools to use for improved returns. A financial advisor can help you maintain your portfolio during market slumps.

A financial advisor can guide you towards making better financial decisions. While your bank may offer a range of financial advisors, you may want to be prudent and research other financial advisors as well who might be suitable for your financial requirements.

It may be greatly beneficial to you to begin your investment activity with the help of a financial advisor, unless you have in-depth knowledge about the financial market and the time at hand to study the markets. Engaging with a financial advisor should be seen as an investment in itself rather than as an expense. That said, you may want to compare costs and research the fee structure of the financial advisors before you engage with them.

Are you looking for a fiduciary financial advisor? Use the free advisor match tool to get matched with 1-3 qualified financial fiduciaries who may be able to help you with your specific queries and create customized financial plans for you.

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The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice.
A professional financial advisor should be consulted prior to making any investment decisions. Each person's financial situation is unique, and your advisor would be able to provide you with the financial information and advice related to your financial situation.