The Most Important Question You Need To Ask Your Broker

Have you ever paid for something and wondered why? 

Most of the time this happens to me in restaurants.  I order something that is supposed to be served hot and it comes out cold or I order something that is supposed to zesty and it comes out bland.  In cases like this, I could send it back for another one, order something else, or ask for a refund.

On other occasions this has happened to me with services. I took my car in for service to stop an annoying squeaking noise on the driver’s side.  I left with a new lower control arm and ball joint, two weeks later the noise returned.  I have since had resting struts replaced on both sides and you guessed it: the same annoying noise.  Cases like this are a little more difficult to resolve, but I am never afraid to push for a huge discount or a free rental car! 

Either way, if I pay for something and it is unsatisfactory I want to be made whole.  Who doesn’t?

When it comes to your finances and brokers, being made whole isn’t really an option.  Brokers provide advice and will act on your behalf (if you give them permission to), but none of their advice is guaranteed and they don’t come with a warranty.  Regardless of how your broker is performing, the most important question you need to ask is:

WHY AM I PAYING YOU?

This is a loaded question.  You may not want to phrase it like this, but you need to know the answer.  If they can’t tell you, this is a bad sign.  You can’t recover any losses realized due to bad advice from them, but you can save yourself the fees and commissions in the future.  After all, you can lose money on your own.  Why pay someone else to do it for you?

All brokers are not bad.  Every broker will make a losing decision at some point because markets are unpredictable, but if you can’t find the value in the service you are provided with it is time to ask the question.

After you ask it I would be delighted if you share the answers with me!