What to look for in a financial advisor:
Before you seek out a professional, you need to determine what your financial goals are.
Whether your goal is to pay down debt or learn more about where to invest your money, you should look for experts with credentials tailored to your specific needs.
Ask friends and families for referrals, but don’t stop there – shop around. It’s perfectly fine – and encouraged – to interview multiple planners before choosing one.
You should expect that the professional you choose will spend enough time with you to fully understand your needs and respond to your questions.
Taking financial advice is going to cost you. But when it comes to making life-changing financial decisions, it might save you money in the long run.
If you’re using an adviser, always always make sure it’s an independent financial adviser.
If an adviser is ‘independent’ or a firm advertises that it gives ‘independent advice’ this means that it’s able to advise and sell products from any provider right across the market. Therefore you should get the very best advice and products tailored just for you.
Throughout your life you’re likely to need different financial products. A financial adviser can help you make the right decision about the best product for you.
What questions should I ask an adviser?
Don’t feel embarrassed. You’re potentially going to be transacting a lot of money via this person, so you have every right to ask questions and make sure you’re confident in your decision.
Usually your first meeting with a financial adviser is free, so you’re under no pressure to use them if you’re not impressed, or you simply don’t ‘click’. If you go in armed with the below list of questions (and any others you have of your own) you’ll be best placed to make a decision.
What is your investing philosophy?
- You always want an advisor or planner who has a similar tolerance to risk. Even though they say they can adjust their philosophy to meet your needs, you should remain wary. Prior success does not necessarily translate over when adopting a new approach to investing.
Will I be working only with you, and how often will we remain in contact?
- The success of a financial advisor or planner often hinges heavily on interpersonal communication. How could someone effectively manage your finances if they do not know you on a personal level, and understand your ever-changing needs and desires?
What makes your client experience unique?
- Don’t feel uncomfortable asking this question. Any competent advisor or planner should be able to easily answer this question. It is a great question to close with, as it gives them the opportunity to summarize everything that you have went over, as well as address anything that may have been glossed over during the interview.
Would you be willing to sign a Fiduciary Oath?
- Depending on the type of financial advisor or planner you choose, the standard of fiduciary duty they are required to adhere to may vary. To ensure that there is no potential conflict of interest, you can simply have your advisor or planner sign a fiduciary oath. This will create a binding obligation for your advisor or planner to work in your best interests. Here is an example of a Fiduciary Oath you can use.
- The Committee for the Fiduciary Standard lists five core fiduciary principles:
- Put the client’s best interests first;
- Act with prudence – that is, with the skill, care, diligence and good judgment of a professional;
- Do not mislead clients – provide conspicuous, full and fair disclosure of all important facts;
- Avoid conflicts of interest;
- Fully disclose and fairly manage, in the client’s favor, unavoidable conflicts.
- Look for the advisor size that is just right for you. An advisor who is big enough to demonstrate success and expertise, but not so big that you’ll get lost in the crowd. To find this happy medium, strive to understand the advisor’s business. One of the most important questions to ask is how much experience and success they have with clients like you – people with similar levels of assets and similar levels of complexity. Assets and revenues from clients similar to you are substantially more meaningful than those from clients who are not. Be sure to also ask where you’d fall in terms of the advisor’s book of clients – in other words, would you be in the lowest tier in terms of assets and complexity, in the highest, or right in the middle? Finding the best advisor is much more about expertise and quality of advice than about asset and revenue levels. What you’re looking for is someone who will invest your assets to add to your net worth, not theirs.
- As the final step in choosing your financial advisor, you want to be certain you avoid misunderstandings that could tarnish the relationship later on.The first item you’ll want to confirm with your financial advisor is cost. Make sure you know exactly what you are going to be charged for his or her services. Second, confirm who will be your primary point of contact for service- and investment-related issues. Depending on the advisor’s team, different people may handle different needs or request. Finally, confirm how often and under what circumstances the advisor is going to contact you. This should include how frequently the advisor will meet with you to review your portfolio performance and what will be included in that review . Also, given the uncertainties of the markets, you should have a mutual understanding as to when you’ll be informed if an investment isn’t working out as planned.
- You should be able to find a financial professional with whom you enjoy meeting.
- Deciding precisely what you need and choosing an adviser can be time consuming but worth the effort.
- Mintco Financial Team of Independent Advisors strive to be true advocates for you, our client. Mintco Financial operates under rules that hold us to a fiduciary standard of care for our clients.