Find A Good Financial Adviser

Monday, May 28, 2012, AM | Leave Comment

As with all your investments, you must make your own determination whether an investment in any particular security is consistent with your investment objectives, risk tolerance, financial situation, and your evaluation of the security.

Keep the following points in mind before you start looking for a good financial adviser.

  • As with all your investments, you must make your own determination whether an investment in any particular security is consistent with your investment objectives, risk tolerance, financial situation, and your evaluation of the security.

  • Generally, among asset classes, stocks are more volatile than bonds or short-term instruments.

  • Past performance is no guarantee of future results.

Financial advisers ought to follow their own advice…

It is very hard to find advisers of anything who follow their own advice. There are common phrases to describe this phenomenon:

  • Doctor, heal thyself

  • The cobbler’s children have no shoes

  • Contractor’s house has a leaky roof

While I would be more comfortable with someone who followed his own advice, we all know

  • Excellent doctors who smoke or are overweight

  • Capable lawyers who don’t have a will or estate plan

  • Intelligent MBAs who are overwhelmed by their own taxes

Ultimately I don’t think that whether or not a professional follows his own advice is a good indication of the quality of that advice. For many people dispensing advice or assistance is their day job, and no matter how good they are at it, after doing it for 60 hours per week it’s easy to neglect their own situation.

Having said that, as always, find a good Financial Adviser. Remember, it is your hard-earned money. Do some research on your own.

To select the best financial planner or consultant to meet your personal and business needs,

  • You must conduct due diligence.

  • The responsibility is on you to seek and employ a financial counselor who is competent and works for a credible company.

  • Look at their resume, verify their certifications and check their references.

  • If you find someone with charisma, but who lacks technical depth, keep looking.

Just because a planner has earned a professional degree or certification, it doesn’t necessarily mean the individual has the expertise you need.

The following websites will help you in choosing a good financial adviser:

  • Investment Adviser Guide

    North American Securities Administrators Association – The information is intended to be a brief overview concerning the investment adviser industry. Topics include definitions, characteristics of an investment adviser, regulators, application process, licensing periods, record-keeping requirements, custody of client funds or securities, disclosure requirements, conflicts of interest, and regulator audits.

  • Protect Your Money: Check Out Brokers and Investment Advisers

    U.S. Securities and Exchange Commission – Do research on brokers and investment advisers. Follow SEC guidelines.

  • NAPFA membership

    Make sure that Financial Adviser is a member of the National Association of Personal Financial Advisers (NAPFA), which is a membership for fee-only financial advisers around the country. NAPFA has a member locator on its website, which is a good place to find someone on your side.

  • Educate yourself

    NAPFA has some educational information on its website, including a questionnaire listing the group recommends people ask prospective financial advisers that could come in handy as you meet with people you may end up entrusting with your money.

  • FINRA broker check

    Financial advisers require expertise and a commitment to ethical standards and continuing education. If the consultant is a broker registered with the FINRA, you can go to the Financial Industry Regulatory Authority (FINRA) to see if s/he has had any history of improper or unethical conduct.

  • Ethics check

    Last but not least, check ethics of the Financial Adviser. Even though referrals are usually great for contractors and tax preparers, know that the best crooks have credentials – so a rave review and some initials after his or her name don’t cut it. Check out their background with the National Ethics Bureau.

In a Nutshell
Finding a good financial adviser can be the most important step you can take. Make sure you follow the above steps to find one.

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