Finding the right financial advisor for you can be a difficult task. After all, how the hell do you know who to trust? And just because someone can be trustworthy, do you really have all the answers to the questions you need help with? What level of experience do they have? And more importantly, are they really operating in your best interest or are they just looking out for themselves? As if these weren’t enough concerns, you should also be concerned about the ethics of your advisor. You don’t want to find yourself working with the next Bernie Madoff who goes off with all your money or is using his valuable assets to fund his next big Ponzi scheme. So how do you sort through all the options and find the right advisor for you?
Let’s look at 3 things to pay attention to when selecting the right financial advisor for you and your family. First, how do you know that they are legitimate, second, how do you know that they have your best interest at heart, and third, how do you know that they will be a good fit for you? Let’s explore these three questions in detail to help you get the help you need.
So how do you do your due diligence and ensure that an advisor you are thinking of working with is actually a legitimate financial advisor with verifiable experience and up-to-date licenses? The first place you may want to check is a website called Broker Check. You can search Broker Check to find the official website. This website has a free tool for researching the background and experience of financial brokers, advisers, and companies. Broker verification can instantly tell you whether a person is registered as required by law to sell securities, offer investment advice, or both. Broker verification also gives you a snapshot of an advisor’s employment history, information on licensing and regulatory actions, arbitrations, and complaints. Wouldn’t this information be good before entering into a relationship with an advisor?
Next, it is important to discern whether an advisor has your best interests at heart or not. One way to help you figure this out is to ask your advisor if they are acting as a fiduciary. I know it’s a three dollar word, but all it means is that they are legally bound to put your interests before yours and disclose any conflicts of interest that might interfere with that goal up front. For example, if a trustee is going to be paid a commission for a product that you are recommending, they are required to notify you before you make the purchase. Another helpful thing to keep in mind is looking for an advisor who asks to see more than your financial statements. Before they start working with you, they should ask you to see your tax returns, your legal documents, and your insurance contracts. If all they want to see or talk about is your investment statements, how can they really take your entire situation into account when making recommendations?
Lastly, you should never feel any sales pressure to move on or make a hasty decision. A professional advisor won’t use old-school sales tactics to win you over as a customer. You may need to meet with more than one advisor and see how you feel at each meeting. If you feel pressured or uncomfortable in any way, this is probably not the right Advisor for you. You should get the feeling that the Advisor in question is asking good questions in order to help you make an informed decision about your money that feels right to you. If you get some kind of feedback that he / she is more interested in making a sale than doing the right thing, then it should probably happen to someone else.
Certainly, there are likely other factors that you might consider, such as the Advisors specialty and even proximity to your hometown. However, if you start with the basics of doing your due diligence, making sure they are concerned about putting your interests first and deciding if you have a good feeling about him / her, then you are off to a great start in finding the right financier. Advisor for you. Happy hunting!