You may have had a bad experience with a financial advisor or know someone who has. Things have been pretty tough over the last several years for investors and advisors. Many of the corrupt financial advisors have been weeded out, but some still possess traits that you need to stay clear of.
Keep in mind that there are reputable financial advisors out there who have your best interests in mind. If you do a little research and ask the right questions you should be able to find an advisor you can trust.
1. Looking for Business -you should be weary of financial advisors that contact you. You’re looking for a successful advisor who doesn’t need to go looking for business. You should be looking for him.
2. Place of Business -you should go to your financial advisor’s place of business to see how she or he works. Pay attention to whether the office is organized, if the files are in order and if he or she is busy.
3. Certification -make sure your advisor is a Certified Financial Planner, or CFPA. This is very important. You want to make sure that your advisor has the right certification and educational background to be handling your money.
4. Payment -you should discuss payment the first time you meet with an advisor. You should ask him what his fees are and how he makes money. You should be the one to bring up payment.
5. House Calls -if an advisor has time to come to your home or office you should be weary. A successful financial advisor doesn’t have time to visit clients unless you are investing a substantial amount of money with them.
6. Informed -find out how often you will be in contact with your financial advisor. Your advisor should keep you up-to-date about what is going on with your money. A good rule of thumb is to make a date every month where you touch base on the performance of your portfolio, even if it’s just a quick conversation.
7. Inquisitive -when you meet with an advisor for the first time, he or she should ask you a number of questions. They should want to know if you’re married, if you have children, a will, how your health is and more. If your spouse isn’t with you he or she should want to know why. If she isn’t interested in these basic things it should raise a red flag. They should also ask you what your goals are and what you want to achieve. If they are promising to make you rich or guaranteeing you large returns, be weary!
8. References -make sure you ask for at least three references. It’s important to speak with a few people who are satisfied with their investments.
9. Returns -you should ask to see his returns for the past 10 years and compare them to the stock indexes. This will give you a good indication of how well he will perform …