Things To Consider With Financial Advisors
Ernie Neve, CPA
September 8, 2020
Just about every day, the phone rings with a client or a friend of one asking about financial advisors. “Do I know this firm?” “Are they any good?” Can I trust them?”
All great questions, and all revolve around one root concern: What should we look for when we try to begin a relationship with an individual or company designed to give us advise one creating (or maintaining) wealth?
Well, there’s a BUNCH of ways to look at this challenge, but let me give you a few pointers and items to look at when it’s time to put your shekels on the line…
Do they have a fiduciary responsibility to YOU? Here’s a dirty little secret – most of those “financial advice” companies exist to make money for the funds they’re trying to sell you. I won’t name names, but you know their advertising and see them in the small commercial centers all over the country. In essence, this should be the first question you answer in your search – making sure they work for you and can only make money when you make money.
Are THEY rich? This might seem subjective, but if you’re planning on using someone’s financial advice to grow your wealth, doesn’t it make sense to find someone who’s doing well financially? You might not be able to see their tax returns, but if you’re investing with them, then you should at least be able to take some solace in the fact they are following the same advice they’re giving you. Of course, different people are at different places on their journey, so you might not be exactly where they are, but it’s realistic to expect similar advice from a “real” advisor.
What is their specialty? Financial advisors often specialize in certain types of planning, so you need to make sure that you’re clear on your goals and those goals are compatible with the advisor or firm’s specialties. This isn’t just about retirement planning, either – it could be stocks, bonds, mutual funds, FOREX, or a host of others. You’ve got to know and be 100% you’re both aboard.
Ask for the proof. Anyone can say they give financial advice, but “real” financial advisors have taken the classes, passed the classes, and even in some cases, received the title “Certified Financial Planner.” Ask to see their credentials – you’re looking for licenses, tests, and credentials, including the Series 7, and Series 66 or Series 65 tests. Take the time to make sure “your guy” is the real deal.
Don’t Hire the First Advisor You Meet. It might seem obvious, but hiring a financial advisor is a lot like dating – you “shouldn’t” marry the first person you ever took out on a date; ditto for financial advisors. In fact, there’s actually some strong logic to hiring an advisor that is similar in age to yourself, because it can allow you to be hitting similar milestones in life – like kids, career changes, and, yes, retirement, at similar times and economic markets.
Hiring a financial advisor doesn’t have to be hard, and while there are countless competent folks who can do it, knowing what you want and how to ensure you’re getting good advice is the biggest and most important part. Of course, we have a list of professionals we trust, and we’re happy to share our own suggestions, so just reach out to me or the team and perhaps we can help you find the right advisor.