Many people ultimately decide that they need a financial adviser to help them reach their financial goals. As someone who has seen many different advisers at work, I am here to let you know that not every financial adviser is created equally. I am often surprised at how casual people are when it comes to selecting the right financial adviser for their particular situation. Realize that if you don’t find a high quality adviser, you are taking a big risk. Many people who claim to be a “financial adviser” are simply salespeople looking to make a quick buck, and some, such as Bernard Madoff, turn out to be pure scam artists. At the same time, there are many financial advisers who actually look out for their customer first, but you must put in some time to find the right adviser for you.
Five Steps to Finding the Perfect Financial Ad visor for You
1. Find Someone You Can Trust- This really should go without saying, but entrusting someone with your financial and investment decisions is a huge step. Before you ever commit to any single adviser, you must hold them to extremely high ethical and moral standards.
2. Go With a Fee-Only Adviser- The financial system has been full of “professionals” who use the commission based system to their advantage. I strongly suggest you look for a financial adviser who charges a set fee, rather than someone who receives a piece of what they sell you. Fee-only advisers tend to actually recommend financial products they believe strongly in, rather than ones that will simply help pad their pocket.
3. Research Their Education and Background- The education of your financial adviser should be paramount in your decision making process. Did this person graduate with a degree in marketing or a degree in finance? You want to know that what you are getting is a professional in the complicated world of finance.
4. Ask Tough Questions- This is a crucial step that many individuals have a difficult time completing. You shouldn’t feel as if it is wrong to ask difficult questions. In essence, you should consider this your chance to conduct a job interview on the prospective financial adviser. Asking fair, but difficult, questions will help you make the best decision in the long run.
5. Find Someone Who is Available Often- It can be quite difficult if you end up with a financial adviser who doesn’t get back with you in a timely manner. Talk to others who have dealt with this adviser about whether they are easily reached. If you have a question that needs answered, you need to know that someone will assist you promptly.