Questions to Ask Financial Advisors You Are Considering Hiring
It is important to learn what things should be taken into consideration when hiring a financial advisor to protect yourself and your family.
Some Things to Consider1. Fees: Some charge an hourly fee, some charge a fee based on percentage of assets under management, some get paid commissions for products they sell. Only you can determine which is right for you or whether you feel a particular mode of compensation aligns your needs with the advisor*s.
2. Is the advisor a fiduciary. A fiduciary needs to invest with your best interests in mind. A non-fiduciary only has to sell a product or investment that is suitable which may or may not be in your best interest.
3. Who is the custodian of your funds. A financial advisor should never be your custodian. They should be parking your money with a reputable broker that is licensed in your state and with the major federal agencies.
Learn About the Financial Advisor4. What are their credentials. Some, like a CFP, require significant training and experience and a difficult test (as well as required continuing education to maintain the designation) to obtain the designation and some are a brief online course that can be done in a few hours.
5. How long has the professional been providing financial advice.
6. Has the professional every been disciplined? There are several sources to check to see if the professional has ever had issues with integrity or honesty.
7. What is your philosophy on money management? Beat the market? Low risk? Low expense investments? Hedging? Make sure their investment philosophy works with your needs and comfort level.