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 trusted, do they 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 also have to worry about the ethics of your adviser. You don’t want to find yourself working with the next Bernie Madoff who runs off with all your money or is using his valuable assets to finance 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 look out for when selecting the right financial advisor for you and your family. First, how do you know they are legitimate? Second, how do you know they care about you? and third, how do you know they will be right for you? Let’s explore these three questions in some detail to help you get the help you need.
So how do you do your due diligence and ensure that an adviser you’re considering working with is actually a legitimate financial adviser with verifiable experience and up-to-date licenses? The first place you might want to check is a website called Broker Check. You can simply search for Broker Check to find the official website. This website has a free tool to research the background and experience of brokers, advisers and financial companies. Broker Check can tell you instantly if a person is registered as required by law to sell securities, provide investment advice, or both. Broker Check 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 helpful before entering into a relationship with a consultant?
Next, it is important to discern whether or not an Advisor cares about you. One way to help you figure this out is to ask your advisor if he or she is acting as a trustee. I know it’s a three dollar word, but all it means is that they are legally required to put their interests before their own and disclose any conflicts of interest that may interfere with that goal up front. For example, if a trustee is going to be paid a commission for a product that she is recommending to him, he is required to tell her before she buys it. Another useful thing to keep in mind is looking for an advisor who will ask to see more than her financial statements. Before they start working with you, they should ask to see your tax returns, legal documents, and 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?
Finally, you should never feel any sales pressure to move on or make a hasty decision. A professional advisor will not use old-school sales tactics to win you over as a client. 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 may not be the right counselor for you. You should get the feeling that the advisor in question is asking good questions with the goal of helping you make an informed decision about your money that feels right to you. If you’re getting any kind of feedback that he/she is more interested in making a sale than doing the right thing, you should probably pass it on to someone else.
Certainly, there are likely other factors you could consider, such as the specialty of the advisors and even proximity to your hometown. However, if you start with the basics of doing your due diligence, making sure they care about putting your interests first, and deciding if you have a good feeling about him/her, then you’ll be off to a great start in finding the right financier. Advisor for you. Happy hunting!