If you’re in the position of needing guidance with your investment portfolio, you already know that you have a lot on the table. An adviser has the potential to help lead you down the path toward financial security, but he or she could also give bad advice and cause you to lose a lot of your hard-earned money.
1 What Type are They?
Before making this important decision, one needs to understand the options they have to choose from. Stockbrokers will inform you on which stocks buy and sell. Money managers, handle your assets and provide investment options including securities. Chartered financial analysts, can advise on every area of your portfolio as they have passed many tests including but not limited to economics, accounting security analysis and money management.
2 What is Their Record?
It should go without saying that you don’t want an individual with a sordid past. Even though there are strict standards of conduct that must be adhered to by each financial person, one can still have complaints against them. If complaints have been made against a potential adviser you have the right to know about them. Form ADV, which is available on the Securities and Exchange Commission (SEC) website, will alert you to any investment advisor malpractice problems.
3 What Services Do They Offer?
Not all financial persons provide the same services. Some specialize in asset management, others focus on investments and some spend their time helping clients prepare for retirement. While you’re talking with a potential candidate, let each of them know exactly what you’re looking to receive help with. This will ensure that they can offer the services you need.
4 What References They Have?
The best way to find a great financial person is by word of mouth. I would suggest you get a referral from a friend but be sure they have had a number of years of success before taking their recommendation. A few months is not a good measure of how successful they are as there are many people out there giving investment tips who are not actually licensed.
5 What Exactly Do They Charge?
Some investment advisers charge a flat rate and others take commission from the value of the money that they help you manage. Before moving forward, make sure that their fees, and the way they are calculated, are something you feel comfortable with. It won’t help your financial situation to become indebted to a person who had some sneaky fees hidden in the fine print. To avoid this, ask for a copy of their listed fees and look it over carefully before making your decision.
Choosing an investment adviser may seem overwhelming, but if you take the time to carefully investigate the situation and follow your instincts, you will end up with someone you can trust. From there, all you have to do is listen to them.
