Ever feel like your financial advisor is dodging your calls? It might not just be bad service—it could be about the money. If you’ve mysteriously begun to feel like you’re on the bottom of your advisor’s priority list, you may be. Here’s why that happens and how to fix it.
The Confusing World of Financial Advisor Pay
Most people have no clue how their financial advisor gets paid—or if they’re even paying them at all. Advisors typically earn through two main channels: commissions or advisory fees. Commissions are a one-time payout, like a realtor’s cut when a house sells—great for a single transaction, but not for ongoing advice and service. Advisory fees, on the other hand, are a recurring cost, usually 1-2% of your account’s value. For example, a $100,000 account with a 1% advisory fee costs you $1,000 a year.
The problem? Many clients expect ongoing advice and service (they should—it’s where advisors add real value), but they’re not paying for it. Maybe you paid a commission on an annuity a decade ago, and your new advisor isn’t earning anything from it. Or maybe you have an account with $10,000 in it and a 1% advisory fee, generating just $100 a year for the advisor. Either scenario has the potential to place your account at the bottom of your advisor’s priority list.
Don’t misunderstand, I’m not saying advisors should behave like this. I’m just pointing out what I’ve seen in years of practicing. Instead of having a frank conversation about service and compensation, too many advisors just quietly sideline low-paying clients. This is why some clients get handed off to a junior advisor or are left wondering why their emails go unanswered.
So, What Can You Do?
It starts with knowing what you want from your advisor. Here’s how to approach it:
- Hands-Off Approach: If you just want to buy investments and forget them—no tweaks, no check-ins—commissions might work. Just know you’re not paying for ongoing advice and service.
- If You Want More: Crave regular guidance but aren’t getting it? Ask your advisor how they’re being compensated. If you’re shelling out an ongoing fee and still feel ignored, you’ve got a dud. If they’re not paid for ongoing work, talk about switching to an advisory fee. Fees and service levels vary, so shop around to find the right fit.
- If Funds Are Tight: Don’t have much to invest yet? Many advisors offer hourly consultations or even some free advice to nudge you in the right direction. My wife and I did this early on—paying for an hour of expert advice early on helped us implement simple strategies on our own that helped us make meaningful progress until we could afford full-time support.
The Bottom Line
Your advisor’s silence might not mean they’re incompetent—it could mean they’re not incentivized to pick up the phone. Whether it’s a stale commission or a smaller account, mismatched pay can stall your relationship and your progress. Figure out the experience you want, get clear on the compensation, and don’t be afraid to explore other options. Clarity can turn a frustrating experience into an extremely valuable partnership.
