As your assets grow, you might want help figuring out what to do next with your investment strategy and portfolio. Choosing the right financial advisor is about finding the right match for you. The point of an investment advisor is to help you manage your portfolio and meet your long-term goals. You need to feel comfortable with them – and confident that they can be a solid member of your financial team. Here are a few tips that can help you find the right fit for you and your investment portfolio.
Interview 2 or 3 (or more) potential advisors
Finding the right investment advisor requires a little work and making sure you match well with whomever you choose. Don’t be afraid to set up interviews with two or three potential advisors. You can get referrals from friends, family and colleagues, or search online for potential investment advisors. Most advisors will at least sit down with you for 30 minutes or an hour to get an idea of your needs and this can provide you with a way to determine who is the best choice for you.
Make sure their investing style aligns with your values
While you don’t need to agree with your investment advisor about everything, it does help if you have similar approaches to money and if you’re mostly on the same page about your financial future. When you interview different potential advisors, ask questions to determine whether their values align well enough with yours, that they will understand your objectives and can support you to reach them.
Do they ask about your goals?
Pay attention to the types of questions they ask – and whether they listen to your answers. Do you feel heard? Do you feel as though the potential advisor will provide you with advice based on your goals? This is important, since there are some advisors who plug you into a formula without really paying attention to your goals and your timelines. While many advisors start with a template, you do want to make sure that there is some tailoring so that your individual needs are met.
Understand how they get paid
You can use the U.S. News & World Report financial advisor database to understand how your investment advisor is paid. One way isn’t necessarily better or worse than the other, but you should know whether they are getting bigger commissions when they steer you toward certain funds or investment products. You can also decide whether an hourly fee, or a fee based on the assets under management, would work better for your needs. The important thing is that you understand the expectations for payment and that you’re comfortable with how your advisor gets paid.
Review their credentials
Don’t forget to find out what credentials your potential financial advisor has. You can ask them for their certificates and then look them up. Many advisors are required to register with a state authority, so you can check to see if their registration is up to date. Additionally, many professional organizations keep lists of currently certified advisors. Follow up on those websites to see if your advisor is still credentialed. In some cases, unscrupulous advisors will claim designations they don’t have. Avoid these scammers by doing your due diligence and verifying that they have the certification.
Check FINRA for disciplinary information
Don’t forget that you can check the Financial Industry Regulatory Authority, also known as FINRA, for information about whether an advisor has faced disciplinary action. In some cases, advisors can still maintain their certifications and designations even when they’ve run afoul of ethical rules. FINRA can help you get an idea of whether an investment advisor has been disciplined for certain actions. If you see some red flags, you know to look for a different advisor.
Don’t be afraid to say no
Finally, remember that this is your money. While you might need help managing it and making better choices, the reality is that you really do want to do what’s best for you. Don’t be afraid to say no to someone who doesn’t feel like the right fit. If you’re getting a weird vibe, or if it just seems like you’re not going to get the kind of service you need, move on to another potential financial advisor.
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