Do you feel like you’re drowning in financial advice? How can you know which advisor is right for you? When it comes to money and your future, who can you trust? With so many different financial advisors out there, how do you know who is the right one for you?
Financial advisors come in many different forms. Some have formal certification, while others may be just advising friends or family members. So how do you know which advisor will serve your needs best? Here are some things to consider when choosing financial advisors.
Ask Your Advisor These Questions
What are the fees associated with your services? How much do you charge? How will those fees be calculated? What is your investment philosophy? What is your investment track record? What are your credentials? Are you a fiduciary? Do you have a minimum account size or investment requirement? Do you offer any type of financial planning or financial planning assistance? Will you meet with me one-on-one?
Look For A Registered Investment Adviser (RIA)
Registered Investment Advisors are held to fiduciary standards. That means they are legally obligated to always put your interest above their own. All Registered Investment Advisors have to have an investment philosophy and a track record.
They have to be transparent about how they are compensated. Registered Investment Advisors are regulated by the Securities and Exchange Commission (SEC). This means they have to abide by the same rules and regulations that traditional financial advisors follow.
Registered Investment Advisors also have to abide by a fiduciary standard. This means they are legally obligated to always put the interests of the clients above their own. Registered Investment Advisors are often referred to as fiduciary financial advisors.
Check The Advisor’s Credentials
Make sure the advisor is appropriately licensed and/or certified. He or she should also have a track record that is worthy of your trust. There are many designations and certifications out there. That doesn’t mean they’re all equal.
Some are better than others. Keep in mind that just because someone has a fancy designation or certification doesn’t mean that that’s what they’re using to earn your business. Look for experience and results. You want to see that the advisor is knowledgeable and understands your goals and challenges.
You want to see that they have expertise in the type of investment or financial planning services that they offer. You want to see that they also have a track record of success. If they don’t have a track record, then you should be wary. There is no such thing as a financial advisor who has consistently achieved outstanding results but has no track record.
Look For Transparency
Keep in mind that track record is only half of the picture. The other half is consistency. You want to see that the advisor has been consistently successful over the long term. You want to see that the advisor has been successful throughout different economic climates. You want to see that the advisor has been successful regardless of the political party or economic philosophy.
Final Words: Ask And Ye Shall Receive
If you don’t ask these questions, you won’t receive the answers that you need to make an informed decision about which financial agent is best for you. If you don’t ask, you won’t know. Financial advisors are like everyone else. They won’t tell you about the things that you don’t ask about. If you don’t ask these questions, you won’t know.
