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A financial advisor should help you make informed decisions, but there are warning signs of a bad financial advisor that could indicate when they are doing otherwise. These signs generally include pushing unsuitable products, lacking transparency about fees, or being unresponsive to your questions or concerns. If you’re unsure about sticking with an advisor, here […]

\n","featuredImage":{"id":"cG9zdDoyNzE2NTU=","databaseId":271655,"altText":"A client determining whether her financial advisor is a good fit.","date":"2024-12-16T16:55:19","fileSize":213005,"mimeType":"image/jpeg","modified":"2024-12-16T16:57:40","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2025/01/iStock-2099666418.jpg","__typename":"MediaItem"},"modified":{"datetime":"2024-12-16","readable":"December 16, 2024","readableExtended":"December 16, 2024, 5:00pm ET"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjo3Ng==","databaseId":76,"userId":76,"avatar":{"url":"https://secure.gravatar.com/avatar/ff1d12e3cebfaa1fe2b25aef26174d63?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Becca Stanek is an experienced writer and editor who has worked in the personal finance space since 2017. Her work has appeared in a variety of publications, including SmartAsset, The Week, LendingTree, SoFi, Credible, CNN Underscored, Forbes, Policygenius, Buy Side from WSJ and Atticus, among others. She holds a BA in English from Depauw University and an MFA in Fiction from Queens University of Charlotte.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Becca","fullName":"Becca Stanek","lastName":"Stanek","name":"Becca Stanek","postCount":{"pageInfo":{"offsetPagination":{"total":21,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"bstanek","__typename":"User"},"reviewedBy":null,"writtenBy":{"id":"dXNlcjoz","databaseId":3,"userId":3,"avatar":{"url":"https://secure.gravatar.com/avatar/47938df052bf0a5283bd6b77ab786737?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"SmartAsset employs a team of writers and editors with years of experience in the editorial, news and personal finance industries. Some staff members also hold the Certified Educator in Personal Finance (CEPF®) designation from the Institute for Financial Literacy.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Michael","fullName":"SmartAsset Team","lastName":"Carvin","name":"SmartAsset Team","postCount":{"pageInfo":{"offsetPagination":{"total":1611,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"mcarvin","__typename":"User"},"factCheckedBy":null,"secondEditor":{"id":"dXNlcjoxMTc=","databaseId":117,"userId":117,"avatar":{"url":"https://secure.gravatar.com/avatar/9fffe2eb35204e151b68731435d247c5?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Arturo Conde is a senior editor at SmartAsset. He has a master’s from the Graduate School of Journalism at Columbia University and a bachelor’s from the College of Arts and Science at New York University. As a certified educator in personal finance, he edits and writes content that focuses on retirement, investments, home buying and other financial topics.\r\n\r\nArturo is a bilingual native in English and Spanish, and also writes as a freelance journalist for NBC News, among other publications. 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","

1. They Have Poor CommunicationPoor

","

A financial advisor who is difficult to reach or doesn’t communicate effectively may not be the right fit for those looking to stay up to date with their financial plan. Timely communication builds trust and keeps you confident in the decisions made on your behalf, while poor communication can lead to misunderstandings, missed opportunities, or feeling disconnected from your financial plan.

","

If your advisor avoids your calls, provides vague answers or fails to proactively update you on your financial progress, it could indicate a lack of dedication to your needs, time management problems, too many clients per advisor at the firm or another issue.

","

2. They Have a Confusing or Expensive Fee Structure

","

An advisor with a confusing or well above-average fee structure may not have your best interests at heart. A financial advisor’s fees should be straightforward, and your advisor should clearly explain how they are calculated—whether it’s hourly, as a percentage of assets under management or commission-based.

","

If costs are vague, layered with hidden charges or seem disproportionately high without clear justification, it could indicate a lack of transparency or fees that aren’t proportionate for the services they’re providing. Further, high or unclear fees can eat into your investment returns over time, leaving you with less value in the long run.

","

3. They Push Certain Financial Products and Services

","

Some financial advisors may also be dually registered as representatives of broker-dealers or licensed to sell insurance products. These dual roles can create a potential conflict of interest if the advisor buys specific products to earn commissions rather than focusing on what fits with your investor profile and best interests.

","

If you feel pressured into buying a particular financial product—like an insurance policy, annuity or mutual fund—without a clear explanation of how it fits your financial goals, this could be a warning sign. An advisor should prioritize your financial objectives over their own compensation in all cases, so if their recommendations are driven by anything other than strategy, it may be time to evaluate whether their advice truly serves your best interests.

","

4. They Ignore Your Unique Needs

","

An advisor who provides cookie-cutter services without considering your unique financial situation might not be ideal, particularly if you’re looking for a personalized approach. Everyone’s financial circumstances and goals are different, and most advisors will offer a more customized approach when making their recommendations and decisions.

","

For example, if you’re nearing retirement, an advisor should create a plan that considers your income needs, healthcare costs and risk tolerance, at the very least. Similarly, a younger client may require strategies focused on debt management and long-term growth.

","

If your advisor is offering generic solutions or not taking the time to understand your specific needs and goals, it could mean they aren’t committed or able to provide you with personalized advice that serves your specific financial situation and goals.

","

5. They Churn Investments in Your Portfolio

","

Account churning occurs when a fee-based advisor excessively trades the assets in your account to generate more commissions for themselves. This illegal practice can lead to unnecessary fees and can negatively impact your short- and long-term investment performance.

","

If you notice frequent buying and selling without clear, justifiable reasons, it could be a sign of churning. Keep an eye on your account statements and question any activity that doesn’t align with your investment goals.

","

A responsible advisor should always have a sound strategy behind each trade and be transparent about the reasons for their actions. In turn, churning can signal that your advisor may be prioritizing their own profits over your financial interests.

","

6. They Don’t Use an Independent Custodian

","

An independent custodian is a third party that holds and safeguards your assets, adding an extra layer of protection against fraud. If a financial advisor does not use an independent custodian, it could be a red flag. Without this safeguard, there’s an increased risk of unauthorized transactions or even misappropriation of funds.

","

An advisor who manages and holds custody of assets may have excessive control, which could lead to unethical behavior in extreme cases. Verify that your advisor uses an independent custodian to protect your investments and reduce potential conflicts of interest.

","

Bottom Line

","

","

Choosing the right financial advisor involves more than just checking credentials—it requires paying attention to how well they meet your specific needs, communicate with you and protect your assets. Being aware of the warning signs of a bad financial advisor can help you determine if your advisor truly has your best interests at heart. Searching for an advisor who prioritizes transparency, tailored advice and ethical practices can help you find someone you feel comfortable working with and who will genuinely serve your needs.

","

Financial Advisor Tips

","$43","

Photo credit: ©iStock.com/andreswd, ©iStock.com/bojanstory

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\n","featuredImage":{"id":"cG9zdDoyODE4NzQ=","databaseId":281874,"altText":"Form 1099-B: What Is It, Who Files It and Who Gets It?","date":"2025-03-19T17:36:02","fileSize":235932,"mimeType":"image/jpeg","modified":"2025-03-19T17:36:07","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2025/03/iStock-1412934199.jpg","__typename":"MediaItem"},"modified":{"datetime":"2025-3-19","readable":"March 19, 2025","readableExtended":"March 19, 2025, 5:37pm ET"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":{"url":"https://secure.gravatar.com/avatar/1d295f71ad5f26fc505155b8d7e5e2a0?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Jeff White is an Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement, and also holds the Certified Educator in Personal Finance (CEPF®) designation. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance.","additionalMeta":{"expertise":"Financial Planning, Small Business, Retirement, Banking","__typename":"User_Additionalmeta"},"email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":{"pageInfo":{"offsetPagination":{"total":16,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"jwhite","__typename":"User"},"reviewedBy":null,"writtenBy":null,"factCheckedBy":null,"secondEditor":null,"hideAuthor":true,"__typename":"Post_Multiplebylinesbyrole"},"adTargetingOverrides":{"fieldGroupName":"adTargetingOverrides","pageGroupNewKey":null,"__typename":"Post_Adtargetingoverrides"},"seo":{"canonical":"https://smartasset.com/financial-advisor/what-is-form-1099-b","metaDesc":"Form 1099-B is a tax form issued by brokers or barter exchanges to both the IRS and the taxpayer. Here is how it works.","metaKeywords":"","metaRobotsNofollow":"follow","metaRobotsNoindex":"index","readingTime":6,"title":"Form 1099-B: What Is It, Who Files It and Who Gets It?","__typename":"PostTypeSEO"},"slug":"what-is-form-1099-b","status":"publish","title":"Form 1099-B: What Is It, Who Files It and Who Gets It?","uri":"/financial-advisor/what-is-form-1099-b","tags":{"nodes":[],"__typename":"PostToTagConnection"},"__typename":"Post","adPageGroupOverride":null,"bylines":{"writtenBy":null,"editedBy":{"id":"dXNlcjoxMzY=","databaseId":136,"userId":136,"avatar":"$45","description":"Jeff White is an Editor for SmartAsset. He's an expert in a variety of personal finance topics, such as investing, banking and retirement, and also holds the Certified Educator in Personal Finance (CEPF®) designation. Jeff has received his JD and MBA and has been featured in a number of publications, such as Investopedia, The Street, Forbes, Yahoo! Finance and more. He currently resides in Utah with his wife and five children, where they cheer for the Denver Broncos and make it to the water to sail whenever given the chance.","additionalMeta":"$46","email":null,"firstName":"Jeff","fullName":"Jeff White, CEPF®","lastName":"White, CEPF®","name":"Jeff White, CEPF®","postCount":"$47","slug":"jeff-white-cepf","__typename":"User"},"reviewedBy":null,"factCheckedBy":null,"secondEditor":null},"category":{"id":"dGVybTo3OTY5","children":"$4a","databaseId":7969,"categoryId":7969,"link":"https://smartasset.com/financial-advisor/articles","name":"Financial Advisor","postCount":814,"slug":"financial-advisor","ancestors":null,"parent":null,"__typename":"Category"},"isModifiedBeforePublished":true,"contentBlocks":["

Form 1099-B is a tax form issued by brokers or barter exchanges to both the IRS and the taxpayer. It provides details about sales of stocks, bonds, or other securities. Typically, brokers are responsible for filing this form with the IRS, while investors receive a copy. Investors then use the information on the form to report their capital gains or losses on their tax returns. The information provided on Form 1099-B includes the date of sale, the type of security sold, and the amount of proceeds received, which helps taxpayers report their taxable income accurately.

","

A financial advisor can help you with your personal finances, ensuring your long-term financial goals are met and enabling you to navigate difficult situations.

","

What Is Form 1099-B?

","

Form 1099-B is a tax document used by investors and taxpayers who engage in the sale of securities, such as stocks, bonds or mutual funds. Issued by brokers or barter exchanges, this form reports the proceeds from these transactions to both the taxpayer and the Internal Revenue Service (IRS). It helps ensure that individuals accurately report capital gains or losses on their tax returns.

","

The form includes essential details about each transaction, such as the date of sale, the type of security sold, the number of shares or units and the sale price. It also provides information on the cost basis, which is the original value of the asset for tax purposes, adjusted for factors like stock splits or dividends.

","

The information reported on Form 1099-B directly determines the amount of tax the IRS will expect from you, so double-checking it for accuracy is advisable. For instance, capital gains are typically taxed at a lower rate than ordinary income, but failing to report them correctly can lead to penalties. Understanding your capital gains or losses can also help you make informed decisions about your investment strategy and tax planning.

","

How Form 1099-B Is Reported on Your Taxes

","

When you receive Form 1099-B, start by determining whether your transactions resulted in a capital gain or loss. A capital gain occurs when you sell a security for more than you paid for it, while a capital loss occurs when you sell for less. Short-term gains, from assets held for one year or less, are taxed at ordinary income rates, while long-term gains, from assets held for more than a year, benefit from lower tax rates. These gains and losses are reported on Schedule D of your tax return.

","

One of the key elements in reporting transactions on Form 1099-B is the cost basis, which is the original value of the asset adjusted for factors like stock splits or dividends. Brokers often provide this information, but it’s important to verify its accuracy. An incorrect cost basis can lead to overpaying or underpaying taxes. If your broker does not provide a cost basis, you are responsible for calculating it. Keeping detailed records of your purchases and any adjustments can help here.

","

Who Can File Form 1099-B?

","

Typically, it is the responsibility of brokers or barter exchanges to file Form 1099-B with the IRS. They must also provide a copy to the taxpayer who engaged in the transaction. If you are an individual investor, you do not need to file this form yourself. Instead, you should receive it from your broker, who is required to report any sales of securities, commodities or other financial instruments to the IRS on your behalf. This ensures that both you and the IRS have a record of your transactions for the tax year.

","

Brokers are required to send Form 1099-B to their clients by February 15 of the year following the tax year in which the transactions occurred. This timeline allows taxpayers to have all necessary documentation in hand when preparing their tax returns. If you have not received your Form 1099-B by this date, it is advisable to contact your broker to ensure there are no discrepancies or delays.

","

What to Do With Form 1099-B

","

While individual taxpayers do not file Form 1099-B, it is recommended that they check the information on it for accuracy. This is the information the IRS will use to determine the tax owed. If the information on the form contains an error, the taxpayer may need to file Form 8949 with accurate information. If the Form 1099-B is correct, the taxpayer can report the capital gains transactions directly on Schedule D.

","

A Form 1099-B can be complex, especially if you have numerous transactions to report. Many taxpayers find it beneficial to use tax software, which can simplify the process by automatically importing data from your broker and calculating your gains and losses. Alternatively, working with a financial advisor or tax professional can provide personalized guidance and ensure that your filing is accurate and compliant with IRS regulations.

","

Bottom Line

","

Form 1099-B is a tax form used to report the proceeds from broker and barter exchange transactions to the IRS. Brokers are responsible for filing Form 1099-B with the IRS and providing a copy to the taxpayer, who then uses this information to report capital gains or losses on their tax return. Taxpayers don’t file Form 1099-B but refer to it to make sure what the broker has reported is accurate because the information can have a significant impact on taxes owed.

","

Tips for Tax Planning

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A financial advisor who has experience with taxes can help you with your planning. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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Estimate your take-home pay after accounting for federal, state and local tax withholding with SmartAsset’s Federal Paycheck Calculator.

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Photo credit: ©iStock.com/FG Trade Latin, ©iStock.com/kate_sept2004, ©iStock.com/Viktor Cvetkovic

"],"experts":null,"link":"/financial-advisor/what-is-form-1099-b","modifiedIso":"2025-03-19T17:37:06.000Z","published":{"datetime":"2025-3-19","readable":"March 19, 2025","readableExtended":"March 19, 2025, 5:37pm ET"},"publishedIso":"2025-03-19T17:37:05.000Z","shareInfo":{"title":"Form 1099-B: What Is It, Who Files It and Who Gets It?","origin":"/financial-advisor/what-is-form-1099-b"},"isNewsArticle":false},{"id":"cG9zdDoyNzc1ODU=","databaseId":277585,"postId":277585,"author":{"node":{"id":"dXNlcjoxNDQ=","databaseId":144,"userId":144,"avatar":{"url":"https://secure.gravatar.com/avatar/e1f3d3a0e571088b1ba1f56a767f73d3?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Brandon is a Certified Financial Planner™ (CFP®), Retirement Income Certified Professional (RICP) and Enrolled Agent (EA) with more than 10 years of experience as a financial professional. He runs his own independent financial planning firm called Belonging Wealth Management, where he helps clients plan out their retirement distributions, minimize taxes, build financial plans and more. He also holds a PhD in Finance from Hampton University, and spent years as an Assistant Professor of Finance at both Louisiana College and East Texas Baptist University.\r\n\r\nBrandon's areas of expertise include financial planning, retirement planning, taxes, Social Security, investing, annuities, general personal finance and more. His quotes have appeared in publications like Forbes, U.S. News and World Report, Business Insider and more.","additionalMeta":{"expertise":null,"__typename":"User_Additionalmeta"},"email":null,"firstName":"Brandon","fullName":"Brandon Renfro, CFP®, RICP, EA","lastName":"Renfro, CFP®, RICP, EA","name":"Brandon Renfro, CFP®, RICP, EA","postCount":{"pageInfo":{"offsetPagination":{"total":103,"__typename":"OffsetPaginationPageInfo"},"__typename":"UserToPostConnectionPageInfo"},"__typename":"UserToPostConnection"},"slug":"brenfro","__typename":"User"},"__typename":"NodeWithAuthorToUserConnectionEdge"},"categories":{"nodes":[{"id":"dGVybToxOTQ2OQ==","children":{"nodes":[],"__typename":"CategoryToCategoryConnection"},"databaseId":19469,"categoryId":19469,"link":"https://smartasset.com/ask-an-advisor/articles","name":"Ask an Advisor","postCount":{"pageInfo":{"offsetPagination":{"total":145,"__typename":"OffsetPaginationPageInfo"},"__typename":"CategoryToPostConnectionPageInfo"},"__typename":"CategoryToPostConnection"},"slug":"ask-an-advisor","ancestors":{"nodes":[{"name":"Financial Advisor","slug":"financial-advisor","__typename":"Category"}],"__typename":"CategoryToAncestorsCategoryConnection"},"parent":{"node":{"name":"Financial Advisor","id":"dGVybTo3OTY5","slug":"financial-advisor","__typename":"Category"},"__typename":"CategoryToParentCategoryConnectionEdge"},"__typename":"Category"}],"__typename":"PostToCategoryConnection"},"content":"$54","date":"2025-03-24T08:00:00","excerpt":"

I am 76 and I have been receiving my benefit since age 62—four years before my full retirement age (FRA). My wife is now 61 and will retire at age 65—two years before her FRA. She will begin drawing her teacher retirement from the State of Texas, which is no longer subject to the Government Pension […]

\n","featuredImage":{"id":"cG9zdDoyMDM5MzM=","databaseId":203933,"altText":"Financial advisor and columnist Brandon Renfro","date":"2023-07-11T14:38:39","fileSize":11056,"mimeType":"image/webp","modified":"2023-07-18T11:35:06","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2023/07/Brandon-Renfro-2.webp","__typename":"MediaItem"},"modified":{"datetime":"2025-3-17","readable":"March 17, 2025","readableExtended":"March 17, 2025, 11:51am ET"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxMjA=","databaseId":120,"userId":120,"avatar":{"url":"https://secure.gravatar.com/avatar/9be66d92947dd5b190bf90987b5e85f2?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Patrick Villanova is an Editor for SmartAsset, producing comprehensive personal finance content to help consumers make better decisions with their money. His particular areas of focus include retirement, financial planning and investing. Patrick studied English at the University of New Hampshire and currently holds the Certified Educator in Personal Finance (CEPF) designation. \r\n\r\nPrior to joining SmartAsset, Patrick was a senior writer at MagnifyMoney, where he covered investing. His career began in journalism and included 11+ years at The Jersey Journal, where he covered sports and news as an editor. His work has appeared on Yahoo Finance, MSN, NJ.com, and The Star-Ledger. 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","

– Norman

","

The elimination of the Government Pension Offset and Windfall Elimination Provision were a welcome development for teachers in Texas and beyond. Many retirees, such as your wife, are now eligible to receive Social Security benefits according to the same rules that apply to everyone else. Let’s look at how those work and how to calculate your wife’s benefit.

","

If you have similar questions about Social Security, retirement planning or investing, connect with a financial advisor and see how they can help.

","

Social Security Spousal Benefits

","

To set some context for others who may not be in the exact same situation as you, let’s start by reviewing the basics of spousal benefits.

","

Social Security benefits are based in part on your earnings record. Larger lifetime earnings result in larger benefits. Each spouse in a married couple can claim on either their own earnings record or their spouse’s record.

","

A person who claims on their spouse’s record can receive, at most, 50% of their spouse’s primary insurance amount (PIA)—a person’s benefit at FRA. It often makes the most sense for the lower-earning spouse to file on the higher-earning spouse’s record when that difference is significant. This is likely your situation, as I know teachers in Texas don’t typically pay into Social Security. Because the earnings record is based on your “covered” earnings, your wife likely has very little on her earnings record.

","

For a simple example, suppose your FRA benefit is $2,000 per month and your wife’s benefit is $800 per month. By claiming a spousal benefit, she could receive up to $1,000 (half of your $2,000 benefit) per month instead of filing under her own earnings record.

","

(For more help planning around spousal benefits, consider speaking with a financial advisor.)

","

How Filing Early or Delaying Affects Spousal Benefits

","

","

Claiming your benefit before reaching FRA reduces it, while delaying past FRA increases it (until age 70). However, the calculation differs slightly for those claiming spousal benefits.

","

Keep in mind that spousal benefits are not affected by the primary earner’s filing age. The primary earner’s full retirement benefit is always the starting point.

","

Even though you filed at age 62 and received a reduced benefit, your wife’s spousal benefit is based on the benefit you would have received at 66. However, spousal benefits don’t increase if the primary earner waits until after FRA to claim their benefit. For example, if you had delayed your benefit until age 70, your wife’s spousal benefit would still be based on your benefit at age 66 (FRA).

","

Lastly, a spouse cannot claim spousal benefits until the primary earner begins collecting their own benefit. So, if you were delaying your benefit past FRA, your wife would have to wait to collect her spousal benefit.

","

(And if you need additional help navigating the ins and outs of Social Security, find a financial advisor who specializes in retirement planning.)

","

The Lower-Earning Spouse’s Filing Age

","

Although spousal benefits are always based on the higher earner’s PIA, they are reduced if the spouse files early. As with their own retirement benefit, someone can claim a spousal benefit as early as age 62.

","

Spousal benefits are reduced based on how early they are claimed:

","

For the first 36 months before FRA: Reduced by 25/36 of 1% per month (approximately 0.694% per month or 8.33% per year).
For any additional months beyond 36: Reduced by 5/12 of 1% per month (approximately 0.417% per month or 5% per year).

","

That works out to about 0.694% per month, or 8.33% for each year, for the first three years. Beyond that it’s .416% per month, or 5% for each year. This reduction is applied to the full spousal benefit, which is 50% of the primary earner’s FRA benefit.

","

Calculating Your Wife’s Social Security Spousal Benefit

","

So, with that in mind, calculating your wife’s spousal benefit can be fairly simple. To calculate her benefit, determine what your full retirement age benefit (PIA) would have been and apply the relevant reduction.

","

If she waits until her own FRA to begin drawing, her spousal benefit will be 50% of your FRA benefit.
If she claims before her FRA, her benefit will be reduced according to the formula above.

","

For example, let’s say you would have been eligible for a $3,000 monthly Social Security benefit at your FRA. While your wife has minimum “covered” earnings, she now qualifies for a spousal benefit thanks to the repeal of the GPO. If she waits until her own FRA of 67 to claim her spousal benefit, she would receive 50% of your PIA or $1,500 per month.

","

However, if she decides to claim her spousal benefit at age 65—24 months before her FRA—her payment would be reduced by 16.67% (24 months × 0.694% per month). As a result, her spousal benefit would be $1,250 per month.

","

(And if you need more help calculating your Social Security benefits or deciding when to claim them, speak with a financial advisor about your income plan for retirement.)

","

Bottom Line

","

","

With the elimination of the GPO and WEP, many government pension recipients who were previously ineligible for Social Security benefits are now eligible. For workers with little or no covered earnings, this likely means a spousal benefit. If they file at their FRA, they receive 50% of the primary earner’s FRA benefit. That benefit is reduced if they file early.

","

Social Security Planning Tips

","$66","

Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

","

Please note that Brandon is not an employee of SmartAsset and is not a participant in SmartAsset AMP. He has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.

","

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\n","featuredImage":{"id":"cG9zdDoyNzkyNDI=","databaseId":279242,"altText":"An advisor and their clients reviewing advisor fees.","date":"2025-03-03T20:30:29","fileSize":235674,"mimeType":"image/jpeg","modified":"2025-03-03T20:31:51","sourceUrl":"https://smartasset.com/wp-content/uploads/sites/2/2025/02/iStock-2161385933-4.jpg","__typename":"MediaItem"},"modified":{"datetime":"2025-3-5","readable":"March 5, 2025","readableExtended":"March 5, 2025, 11:57am ET"},"multipleBylinesByRole":{"editedBy":{"id":"dXNlcjoxOTc=","databaseId":197,"userId":197,"avatar":{"url":"https://secure.gravatar.com/avatar/00cb0f465693d78173a61b56cc33e2fd?s=96&d=mm&r=g","size":96,"__typename":"Avatar"},"description":"Marie White is a Writer/Editor for SmartAsset, and holds the Certified Educator in Personal Finance (CEPF®) designation. She received her English degree from Stevenson University, with a focus on writing and communications. 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The fee your advisor charges is based on the services you’re receiving, the individual advisor’s fee structure and other factors, including the amount of money you have to invest. With $1.4 million invested, many advisors would likely charge about 1% of the account balance as an annual fee. However, this could vary widely among advisors. You can, however, negotiate with many advisors and possibly pay less. In a pinch, you can always decide to go with another advisor who charges less, offers a selection of services that better fit your needs or is preferable in other ways.

","

You can use this free tool to match with a vetted fiduciary financial advisor to discuss their fee structure.

","

Advisor Fees in Brief

","

Financial advisors charge for their services in a number of different ways. The five primary fee setups are listed below, along with brief descriptions:

","

Type	Details
Percentage of assets under management	Based on a percentage of the total assets in your account. May differ based on account size.
Hourly rate	A dollar amount charged per hour of work.
Flat fee	A flat fee, usually annual, for providing services.
Commission	Compensation paid by investment product providers
Performance-based	When a preset performance goal is reached, an additional fee may be paid.

","

Fees based on a percentage of assets under management usually vary from 0.5% to 1.5%. A fee of 1% is about average. The fee may be tiered, with smaller accounts paying a higher percentage and larger accounts paying less.

","

With $1.4 million in an account and a 1% fee, an investor would pay approximately $14,000 per year in fees. This may not be all the fees that are charged, or that the advisor receives. For instance, an advisor may receive a combination of fees paid by the investor, as well as commissions paid for trades or by financial companies that provide investment products.

","

Value of Fees

","

A 1% fee may be a bargain, or it may be too much. It depends in part on the services you receive in exchange. Advisors can supply you with expertise and experience along with an objective source of suggestions about ways to reach your financial goals. The topics you can expect help with include investing, retirement, estate planning and taxes. The benefits you may receive can include avoiding or reducing losses and maximizing gains.

","

Advisors can have different value at different stages of your life. When you’re younger and have few assets, it may be less useful to have a professional overseeing your financial affairs. As you near retirement and have accumulated significant account balances, the stakes are higher and well-seasoned advice becomes more important.

","

Fee Negotiation

","

Fees are not necessarily set in stone. Although not all advisors are willing to negotiate their charges, many are. You can find out what an advisor’s fees are and whether they are open to negotiation by looking at their Form ADV, an official document they must file with the Securities and Exchange Commission.

","

If you’re inclined to negotiate fees, first make sure you understand what you’re paying and what you’re getting. Ask your advisor for a breakdown of the fees and services. Next, if you want to suggest a lower amount, propose a specific fee, such as a lower percentage of assets under management. You may receive a counter-offer, so consider adding a cushion to give you room for your own counter.

","

Advisor Selection

","

If you can’t reach an agreement on fees, your final option is to look for another financial advisor. If you do, don’t base your selection on fees alone. Start by looking for candidates, focusing on advisors who serve clients like you based on factors such as your account balance, age, income and financial concerns.

","

Aim to interview at least three of the candidates you identify. Basic questions you’ll likely want answered include whether the advisor abides by fiduciary duty to always act in the best interests of clients. Also discuss the services offered and the fees charged for them. Communication practices may also be something to focus on. On that topic, any time an advisor candidate refuses to answer a question or can’t explain something clearly, consider it a red flag and an indication to look elsewhere for advice.

","

If you can’t find an advisor who suits your needs and your fee budget, you may want to consider a robo-advisor. These are automated investment programs that use software and computers in place of a human advisor. They usually charge lower fees, as little as 0.25%, and may be most appropriate for younger clients or those with smaller account balances.

","

Bottom Line

","

A 1% fee on $1.4 million in investments means paying $14,000 a year for advice. This may be a lot or a little, depending on whether the investor is getting the services they need and how well financial objectives are being reached. It may be possible to negotiate a lower fee or, if necessary, look for another advisor who may charge less. Interviewing advisors is best approached systematically and thoroughly, with a special eye for openness and candor. A specific advisor may not always be worth the cost to any given investor, but advisors can provide highly valuable insight, experience and a sounding board to help clients succeed.

","

Money Management Tips

","$79","

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