The success or failure of your investments depends on having the right investment advisor. There are no national laws that establish educational requirements for advisors, but some states do have requirements on the books. Find out what your state’s laws and guidelines are.
You are in the Driver’s Seat
You need to carefully choose an advisor who will meet your needs and you cannot be shy about it. Remember that they work for you and with your goals to get the best results. Go into the first meeting and keep that mindset. Look at the process as a job interview and ask them any questions you have.
Define what it is you want
Go into the first meeting with your potential advisor armed with your objectives and goals. Write a list of things you want to achieve with the money you invest. They cannot help you reach your objective unless they have an idea of what direction you want to head in.
You do not have to have the road completely mapped out in detail by any means but having those objectives will help the advisor to help you. In order to further the process, go to the meeting with written copies of your net worth and a statement detailing your income and expenses.
Screen the Candidate
Ask about their educational background and certifications. A designation of Certified Financial Planner (CFP) is a great place to start. The process to becoming a CFP is rigorous and usually includes retirement and estate planning as well as insurance and investment studies.
There are many questions to ask in order to feel confident about the investment advisor you choose. You should ask about their services, clients, education, and qualifications to name a few. Look at the list of questions below and ask as many as you feel are necessary.
- How long have you been an advisor?
- What registrations, licenses, and certificates do you have?
- Are you registered with the Securities and Exchange Commission (SEC) and a state agency?
- What is your philosophy when it comes to investment advice?
- Are you willing to provide references?
- What do I get for the fees I pay and how are you compensated?
- How do you make sure you have the most current information in the financial field?
These are only a few of many questions you can ask when you meet your advisor for the first time.
After the meeting is over start checking the credentials of your prospective advisor. The CFP Board of Standards can give you the license status and any disciplinary records. Also check with the National Association of Personal Financial Advisors for information.
One important thing people tend to ignore is their gut feeling. If you are not comfortable with an investment advisor for any reason, whether it is definable or not, keep looking.