Choosing an investment advisor whose incentives aren't against yours

The core tension in hiring an investment advisor is simple: the better they're paid, the more tempted they are to prioritise their own wallet over yours. But "conflict of interest" is too abstract to be useful when you're vetting someone real. What matters is understanding *how* they profit and whether that profit aligns with what you actually want to happen to your money.

Many advisors earn commission on the products they sell you — a percentage of every fund, insurance wrapper, or structured investment they place. Others charge a fixed fee, or a percentage of your portfolio (assets under management). A handful work on hourly retainers. Each model creates different pressures. The trick is not to avoid all conflict (impossible; advisors need to eat) but to choose someone whose incentive structure rewards the *same outcome* you're paying for.

What "alignment" actually means

Alignment is not about finding a saint. It's about picking a model where the advisor makes more money when *you* win, not when they churn activity or steer you toward high-margin products.

If an advisor is paid a flat fee or a percentage of your assets, they benefit when your portfolio grows and you stay as their client. If they're paid commission per transaction, they benefit every time you buy or sell, whether or not that trade helps you. If they're on an hourly rate, they benefit from spending time with you, which can mean thorough advice — or expensive handholding. None is perfect; what matters is whether the model pulls them toward or away from your interests.

Before you meet anyone, ask directly: "How do you get paid?" If the answer is vague, evasive, or wrapped in jargon, that's a flag. A straightforward advisor will tell you in one sentence whether they earn commission, a flat fee, assets under management, or a mix.

The hidden question: where do the products come from?

An advisor paid on commission will suggest products from multiple providers — or only from a few they have deals with. An advisor who is truly independent (check they're registered as such with their regulator) should be free to recommend the best product for your goal, not the best-paying one for them.

But even independent advisors may have preferred providers or may earn higher commission on certain platforms. This doesn't make them crooked; it's normal. What matters is whether they *disclose it* and whether they can justify why that product (not a rival) is right for you.

Ask: "Do you earn more if I choose product A over product B?" and "Can you recommend me a product from a provider you don't earn from?" A good advisor will answer without defensiveness. If they get annoyed or change the subject, move on.

Fee structures worth comparing

• Assets under management (AUM): usually 0.5–1.5% of what they manage annually. You pay less if your portfolio shrinks, which creates perverse incentive to take risk. But they also win when you add to it.
• Flat annual fee: independent of returns or portfolio size. Pure alignment on outcomes, but you need to verify it's competitive for your account size.
• Hourly rate: good for one-off advice or a portfolio review, not ongoing management. Transparent, but the meter can run.
• Commission: common for insurance-linked investments and certain platforms. Ask what percentage. High commission (3–5%+) on your opening deposit is a yellow flag.
• Hybrid: some advisors charge a modest annual fee plus a small commission on specific products. Disclose it and be clear why.

Red flags that cost you money

Three warning signs that an advisor's incentives are working against you:

They push you to transact often. Frequent buying and selling enriches brokers and advisors on commission; it drains your returns through fees and tax drag.

They recommend products you don't understand. Complexity often hides the commission. If an advisor cannot explain in plain language why you own something, question whether it's for you or for them.

They resist written documentation. Ask for a letter of engagement that spells out fees, how they're calculated, when they're paid, and what you can expect in return. An advisor who will not commit to writing is betting you won't remember what you agreed to.

The goal is not to find an advisor with zero self-interest (none exist) but to hire one whose payday depends on solving your problem, not complicating it. Ask the hard questions upfront, get answers in writing, and trust the ones who don't flinch. Strove's verified advisors have been vetted for registration and track record — use that shortcut to narrow the field, then apply these criteria to settle on the right fit.