Select the Right Financial Advisor
If you do not have a high comfort level with answers to the following questions, you may want to explore further:
- Are they a fiduciary to YOU? (Do they act in your best interest?)
- How important are you to them? (How many accounts do they currently manage? Small Fish/Big Pond?)
- Do they understand YOUR goals and YOUR financial needs?
- Do they provide a cost-effective approach? (If utilizing mutual funds, do total expenses exceed 2%?)
- Have they sold, or offered you annuity products? (Do the benefits exceed the costs? What is the actual net expense?)
- Do they charge commissions?
- Does their strategy make sense for YOUR financial plan?
- Do the securities they hold fit their strategy?
- How much experience do they have managing investment portfolios? (Are they Portfolio Managers or Sales/Incentive Based?)
- Are they experienced in both the management of fixed income and equity investments?
- Will they assist you with (free) planning, including:
- Establishing goals and objectives?
- Establishing appropriate asset allocation to meet goals and objectives?
- Tailoring assets to objectives – including estate plans, income tax planning?
- Coordinating asset allocation to time frame?
- Tracking and benchmarking investment performance and net worth?
- Do they coordinate your investments with your objectives, income tax plans, and estate plans? (Are they using a tax-efficient investment approach?)
- Are they accessible? (if they have over 200 clients, they may not be.)
- Will the benefits I receive exceed the costs? (Do they add value?)
- Will I enjoy this relationship? (If the benefits exceed the costs, your answer is probably – yes.)