6 Tips to Consider when Seeking a Financial Advisor

When seeking an advisor for investing, whether for the short term, long term, or retirement, there are some things that can help you to make a good decision. You want an advisor who understands your investment goals, timeline, and tolerance for risk. There are other considerations, and they include:

  1. Are they a fiduciary? – A fiduciary is someone ethically bound to act in the best interests of their client/customer. This helps to eliminate conflicts of interest between their goals and yours. Because a financial advisor by definition will be recommending investments, stocks, bonds, mutual funds, or other investments, you want someone who is not profiting from the recommendation rather than your interests and goals.
  2. Choose an advisor with compatible strategies and specialties. – Some advisors specialize in retirement planning, some in investments for high income earners, and others in younger investors starting their investing activities. Choose one that specializes in your situation and financial goals. They should also be compatible when it comes to the type of investments they recommend. If you are interested in the stock market, bonds, or both, then choose someone with expertise in those assets. You may have an interest in real estate, and this requires specialized advice. Just be sure to work with an advisor with expertise in the type of assets in which you want to invest.
  3. Shop for an advisor. – Do not just choose the first advisor you find in a web search or through a recommendation. You are seeking someone who may be in your financial future for decades, so do the research and take the time to choose wisely.
  4. Check their credentials, certifications, and results. – There are various certification tests including the Series 66, Series 7, or Series 65. Moving to a higher level, they can become a CFP, Certified Professional Planner. These certifications may or may not be required for them to hang their shingle, but they show a dedication to the expertise needed to meet your needs.
  5. Understand how they are paid. – Will you be working with a “fee only” advisor. They are compensated only through the fees you pay. Others are compensated based on the value of your assets that they manage or advise in management. If they receive any commissions from mutual fund or other assets in which your money is invested, this is a definite conflict of interest; not advised.
  6. You do not have to go it alone. – If you have assets that you want to invest, you are also likely to be working with accountants or other professional business legal, tax, accounting, or business plan specialists. These professionals work with clients on a daily basis that use financial investment advisors. They are in a position to know the advisors with great track records and solid results. Asking them for recommendations to get your research in gear is a good idea.

Working with business financial experts can lead you to qualified investment financial advisors, and with the right team, you could end up saving a ton of money in taxes while growing your assets over time.


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