4 Questions That Help You Find The Right Financial Advisor

Share

A lot of trust is placed in financial advisors. They are tasked with helping us manage our money properly to ensure we remain financially stable in the future. Because it is such an intimate relationship, it is important for each person to find the right financial advisor for them. Different financial advisors excel in different areas, so asking a few questions will help you determine their strengths and whether they are the right financial advisor for your current financial needs.

What Is The Financial Advisor’s Professional Designation?

Many people do not know that there are more than 100 different professional designations for financial advisors. Some professional designations, such as certified financial planner, chartered financial analyst and personal financial specialist, require a CPA credential, while others can be handed out to those with a minimal amount of education and related work experience. Do your research and make sure the advisor is qualified before handing over any of your hard-earned money.

What Services Does The Advisor Provide?

Are you looking for a full package of advising services, including investing and tax services, on a regular basis? Are you looking for someone that you can check with from time to time to ensure that your investments are on track? Both types of financial advisors are available, but they will each have very different requirements and strategies. Before choosing a financial advisor, make sure that the services they offer match up to the services you are interested in. Choosing wrong means that you will either be paying more that you should or be disappointed that the advisor is not doing more for you.

How Do Their Returns Match Up Against Benchmark Returns?

The comparison between the returns that a financial advisor gets and the returns of larger industry benchmarks can show you whether the advisor is providing good advice that will help you increase your wealth. While the stock market is unpredictable, trends can be spotted when comparing the results of a particular stock against the results of the wider industry. Financial advisors use these trends when choosing investments for their clients. If the advisors returns are consistently lower than the benchmarks, it means bad news for the value of your portfolio.

How Is The Financial Advisor Compensated?

There are several different ways that a financial advisor can be compensated. If the advisor has a transparent fee structure, it should be easy to see what you are paying for and how much you are paying for it. In most cases, there is no reason to pay a management fee of more than 1 percent of the total amount of assets being managed. If the fee structure provided to you is difficult to understand or the financial advisor cannot adequately explain how they are compensated, it is a sign that you should probably choose a different financial advisor.

About the author


ModestMoney.com Top Finance Blogs

Archives

SSCP   CAS-002   9L0-066   350-050   642-999   220-801   74-678   642-732   400-051   ICGB   c2010-652   70-413   101-400   220-902   350-080   210-260   70-246   1Z0-144   3002   AWS-SYSOPS   70-347   PEGACPBA71V1   220-901   70-534   LX0-104   070-461   HP0-S42   1Z0-061   000-105   70-486   70-177   N10-006   500-260   640-692   70-980   CISM   VCP550   70-532   200-101   000-080   PR000041   2V0-621   70-411   352-001   70-480   70-461   ICBB   000-089   70-410   350-029   1Z0-060   2V0-620   210-065   70-463   70-483   CRISC   MB6-703   1z0-808   220-802   ITILFND   1Z0-804   LX0-103   MB2-704   210-060   101   200-310   640-911   200-120   EX300   300-209   1Z0-803   350-001   400-201   9L0-012   70-488   JN0-102   640-916   70-270   100-101   MB5-705   JK0-022   350-060   300-320   1z0-434   350-018   400-101   350-030   000-106   ADM-201   300-135   300-208   EX200   PMP   NSE4   1Z0-051   c2010-657   C_TFIN52_66   300-115   70-417   9A0-385   70-243   300-075   70-487   NS0-157   MB2-707   70-533   CAP   OG0-093   M70-101   300-070   102-400   JN0-360   SY0-401   000-017   300-206   CCA-500   70-412   2V0-621D   70-178   810-403   70-462   OG0-091   1V0-601   200-355   000-104   700-501   70-346   CISSP   300-101   1Y0-201   200-125  , 200-125  , 100-105  , 100-105  , 1Z0-803  , 400-051   EX300  , CISM   100-105  , 000-106   400-201   642-732   220-902   70-410  , MB6-703   810-403   70-243  , CAS-002  , AWS-SYSOPS   70-462   70-410   2V0-621   LX0-103   70-461  , 220-902   1Z0-144   70-178   70-270   350-080  , 1Y0-201   1z0-808  , NSE4   102-400  , ADM-201   SSCP  , 200-125  , 640-911   000-104   640-692   300-320   350-060   000-089  , 000-017   1z0-808   700-501   1Z0-051  , 70-177   M70-101   300-209   70-461   3002   N10-006   VCP550   70-487   300-320  , 3002   700-501   NS0-157  , 1V0-601   CAS-002