Find

Looking for a Financial Professional

How to find the right advisor

Creating an effective financial strategy takes time, research, discussion, and much decision-making. You can choose to go it alone, or work with a financial professional. Working with a professional makes this process easier and eliminates much of the stress and anxiety that goes with it. It also greatly improves the odds of your plan succeeding.

How does one find the right financial advisor to work with? This is truly the first and one of the most important steps in creating a life of financial well-being. But where do you begin? Following these simple steps could make your job easier.

How to

Seek out and Work with a Fiduciary

I strongly recommend vetting the advisor you are about to entrust with your hard-earned money and life savings. You want to make sure that the individual is truly qualified to help you. It’s time well spent, and it will increase your chances of creating the right plan for you and your family.

How to

Seek out and Work with a Fiduciary

Presently, there are two legal standards which apply to financial advisors.
Suitability and Fiduciary.

Suitability Standard

The Suitability standard is defined as making recommendations that are consistent with the best interests of the underlying customer. The suitability standard only details that the advisor has to reasonably believe that any recommendations made are suitable for clients, in terms of the client’s financial needs, objectives and unique circumstances.

Fiduciary Standard

The Fiduciary standard states that an advisor must put their clients’ interest above their own. They must follow the very best course of action, regardless of how it affects them personally or their income. Those who conform to the suitability standard only need to make sure their recommendations are suitable, given the client’s age, goals, resources and other factors.

What does all this mean to you?

Let’s apply these standards to a car buying experience. Let’s say a young family comes to a dealership looking for a vehicle to use to take the kids to school, sports, go to the grocery store, etc.

A fiduciary salesman would sit down with the family and discuss their goals, finances, and needs. He would then probably recommend an efficient mid-size sedan, minivan, or small SUV.

A salesman following the suitability standard would make different recommendations. Since they are only required to provide the family with something that will get them from point A to point B, they could recommend a Porsche or a Hummer. They can recommend whatever earns them the highest commission as long as it can transport the family, no matter how uncomfortable or impractical it is.

It means the suitability advisor can sell you a financial product which pays him/her the highest commissions or fees as long as it’s suitable to your situation. This could result in significantly less dollars in your account over time.

Demand to see in writing that your advisor is working in a fiduciary capacity.

How do you learn about the credentials and history of a Financial Advisor?

Look for Experience, Education, Training and Registrations. A great source to obtain this information is Adviserinfo.sec.gov or BrokerCheck.finra.org

These are websites established by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Simply enter the advisor’s name and if he/she is registered with the SEC or FINRA, his/her public record will be displayed, which will give you the answers to the above criteria. Just as important, it will show you if there are any consumer complaints about the advisor.

Adviser Info Broker Check

Does the Financial Advisor have a professional designation?

Possessing a professional designation shows that the advisor dedicated time and effort to increase their knowledge base and skill level in their field. Be aware that Professional Designations are as varied as the stars and so are the requirements to earn them. Learn if the designation is accredited and what the educational requirements are to earn it. Is an examination required and is it proctored at a testing facility? What are the continuing education requirements to maintain the designation? Are there prerequisites of higher education or industry experience?

To learn what those letters printed after the advisor’s name really mean and what was required to earn that specific designation go to: