We continue the series on how to find a financial advisor. Today weâ€™ll whittle down your list.
Youâ€™ve found an advisor or three who look like they might be a good fit for youâ€¦but how do you know? First, Iâ€™d schedule a meeting. Most financial planners and advisors will offer a free introductory meeting so that you can kick their tires and they can see if youâ€™re the kind of client they want to work with.
Going into the meeting, the first thing Iâ€™d do is to shut up and see what questions the advisor has for you.
â€œBut Gary, if Iâ€™m looking for a financial advisor, shouldnâ€™t I be the one asking the questions?â€ Oh, donâ€™t worry, you will, but first get a feel for where the advisor is coming from by seeing what theyâ€™re interested in knowing about you.
You see, some advisors are like the guy whose only tool is a hammerâ€¦everything looks like a nail. So if they start explaining how you need a living trust, more life insurance, a particular stock, or that you need to go through some training classes, even before they even know anything about you, leave. Thatâ€™s not an advisor, thatâ€™s a salesman. A pretty poor one, at that.
Now for your questions. Assuming youâ€™ve done your homework and know what kind of help you are looking for, ask the potential advisor what experience they have in that area of personal finance. They may sound qualified, but if they have never worked on a case like yours, you donâ€™t want to be their guinea pig.
Ask them their qualifications, what it took them to earn those qualifications, and how they maintain their level of expertise. There are many titles and designations that have no requirements other than working long enough at a particular company, or sending in application and a filing fee, sitting through a few hours of a workshop, or passing a very simple test.
Do you want to work with the type of person sitting in front of you? There is no truly wrong answer to this one. Some offices, like mine, will have a single advisor as your specific point of contact. Others employ a team of people. And some will hand you off to whoever has the specific expertise you need at a particular time. All of these setups workâ€”you just need to be aware of it before you hire them.
Ask, â€œHave you ever been disciplined?â€ No, weâ€™re not worried about the spanking they got when they wrote on the upholstery with crayons, but rather whether any of the professional organizations or regulatory agencies they are licensed under have ever found them less lawful or ethical than youâ€™d like. And donâ€™t take their word for it, check it out yourself. Â The SEC has information and links to direct you to important information about brokers and investment advisors at http://www.sec.gov/investor/brokers.htm.
Oh, before you leave you probably want to find out what theyâ€™re going to cost you. More on that next time.
Gary Silverman holds the Certified Financial Planner (CFPÂ®) license and is a member of the Financial Planning Association (FPAÂ®). Gary is the founder of Personal Money Planning, a retirement planning and investment advisory firm, and is a Qualified Kingdom Advisor.