Selecting an Advisor...

Find your perfect financial Advisor: what to look for before and after choosing one.

Before establishing a relationship with an advisor you may want to interview several people to make sure they’re the right match for you. Here are 10 important questions to as you search for the best fit for you.

TEN KEY QUESTIONS

• 1. What experience do you have? Ask for a brief description of the advisor’s work experience and how it relates to their current practice. Check and verify their background. At the website, www.FINRA.org, you will find Broker Check where you can look up advisors and their career background.
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• 2. What are your qualifications? Ask about the credentials the advisor holds, and learn how she stays up to date with current changes and developments in the investment field. There are annual mandatory continuing education (CE) courses every advisor must complete. The advisors who excel seek out additional educational opportunities above and beyond the required CE courses.
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  3. What financial planning services do you offer? Credentials, licenses and areas of expertise are all factors that determine the services an advisor can offer. Advisors cannot sell insurance, or securities products such as mutual funds or stocks, without proper licenses. And they cannot give investment advice unless registered with state or federal authorities.
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  4. What is your approach to financial planning? Make sure the advisors investing philosophy isn't too cautious or overly aggressive for your needs. Learn how she will carry out recommendations or refer tasks to others.
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  5. What types of clients do you typically work with? Some advisors prefer to work with clients whose assets fall within a particular range, so it's important to make sure the advisor is a good fit for your individual financial situation. Keep in mind that some planners require you to have a certain net worth before offering services.
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  6. Will you be the only advisor working with me? Some advisors work with their clients directly, and others have a team of people that work with them. Ask who will handle your account, meet them, and ask whether the advisor works with professionals outside his own practice, such as attorneys, insurance agents or tax specialists. If yes, get a list of their names to check on their backgrounds.
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  7. How will I pay for your financial planning services? Advisors can be paid in several ways: through fees, commissions, or a combination of both. As part of your written agreement, your advisor should make it clear how they will be paid for the services to be provided.
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  8. How much do you typically charge? Although what you pay will depend on your particular needs, the advisor should be able to provide you with an estimate of possible costs based on the work to be performed. Costs should include the advisors hourly rates or flat fees, or the percentage of commission received on products you may purchase.
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  9. Do others stand to gain from the financial advice you give me? Ask the advisor to provide you with a description of his conflicts of interest in writing. For example, financial advisors who sell insurance policies, securities or mutual funds will have a business relationship with the companies that provide these financial products.
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  10. Have you ever been publicly disciplined for any unlawful or unethical actions in your career? The Financial Industry Regulatory Authority (FINRA), and your state insurance and securities departments each keep records on the disciplinary history of advisors. Ask which organizations the advisor is regulated by and contact these groups to conduct a background check.

 

SEVEN KEY TRAITS

It’s important to understand what you can expect in a financial advisor. Here are some key traits.

1. Competence: A good financial advisor should be well-educated, and able to demonstrate a significant amount of experience.

2. Objectivity: Your needs should be at the heart of all your advisors recommendations. Your financial advisor should consider your situation carefully, then give you advice that best meets your goals. This approach may require your advisor to explain that your goals are unrealistic, given current resources and financial commitments.

3. Integrity: Trust is central to a successful financial planning relationship. You rely on your planner's honesty, professionalism and abilities to achieve your goals. When you know your advisor takes her duties and responsibilities seriously and places principles over personal gain, you can form a good working partnership.

4. Clarity: Fair treatment means your advisor will clearly state what financial planning services will be provided and cost. Your advisor will also explain the risks associated with their financial recommendations, along with any potential conflicts of interest. For example, does the advisor gain personally or financially from your purchase of a particular product or from the outcome of a suggested strategy?

5. Diligence: Before engaging you as a client, your advisor will discuss your goals and objectives and explain what you can expect from the relationship and financial planning services. Once your advisor has determined that he or she (or their staff and/or network of related professionals) can assist you, the advisor will make recommendations suitable for you. A diligent financial advisor will reasonably investigate the products or services they recommend and closely supervise any staff working with you.

6.Compliance: Your advisor will not provide investment advice or stock brokerage services unless they are properly qualified and licensed to do so, as required by state or federal law.

7. Privacy: To get the best results from your financial planning relationship, you need to divulge relevant personal and financial information to your financial advisor on a regular basis. Your advisor will keep this information in confidence, only sharing it to conduct business on your behalf, at your consent or when ordered to do so by the courts.