If you’ve decided to replace your current financial advisor or get one for the first time, proceed cautiously. With the Internet, it’s easy to fool people into thinking they’re hiring a professional, but they are really hiring a fraud. Before you give money to anyone, you need to make sure to do extensive research beforehand. Once you have properly vetted all your potential advisors, you can then move forward with interviews. By the end of this process you should know which advisor will work best with you and your finances.
Decide on the Type of Advisor You Want
You will come across four basic types of financial advisors. Each of these advisors have different characteristics that make them unique.
Register Investment Advisors (RIAs) are held to incredibly high ethical standards within the industry of financial services. You pay these advisors through fees and must be able to trust them.
Financial Planners do not have to have a license. This makes it difficult to trust their professionalism and experience. If you look into this category, make sure the person has some sort of certification like the CFP, ChFC or CPA/PFS.
Money Managers are on the same level of professionalism as RIAs. However, as a money manager, they can make decisions regarding your investments without your advanced approval. If you hire this type of advisor, you should take extreme precaution because you will be trusting them with a lot of responsibility.
Registered Representatives are also referred to as stockbrokers, bank representatives and investment representatives. They simply make commissions off of your investments. They are not much more than a salesperson.
Compare Advisors and Gather Data
Once you have decided what type of adviser you want handling your money, you need to research your potential advisers. Look at each persons credentials, services and business practices. Find a handful of people that line up with everything you want. Then dig even deeper by searching them online.
Put their names and the name of their firms into a search engine. You will find results from third parties that provide either positive or negative information about the candidates. Here you will be able to find if there have been any frauds, scams or lawsuits. Respectable financial advisers like Ken Fisher of Fisher Investments Forbes contributor and money manager, will have a strong online reputation to back them up.
Schedule and In-Person Meeting
Your online search should narrow the pool of candidates even more. Call and schedule in-person interviews with your remaining potential advisors. After meeting in person you should have a great idea of the person you want to hire.
This person will be handling your finances. It’s important to take the necessary steps to find the right person.
Vijayraj Reddy
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