Since you will be living off of your nest egg at retirement time picking the right financial advisor can dictate your financial future. Skilled advisors will help you walk off into the sunset with confidence in yourself and your money situation. Choosing an unskilled, inept professional creates a potential financial nightmare.
How do you view your money? If you don’t want to suffer through the ups and downs of the market patiently weigh pros and cons of each advisor you meet with to locate the right match for you and your family. This is not a rush nor is it a contest. Feel comfortable with your advisor. This person will play a huge role in building your financial future. You better vibe with them and their style if you want to retire with the utmost confidence in your finances.
Ask these questions before you choose a financial advisor.
Ask about the Business Model Being Used
Ask about the firm’s business model to get a better idea of how the advisor can serve you. Check into revenue sharing agreements, outside manager usage and whether or not the firm sells its own products. Research all potential conflicts. Demand transparency. Some less than honest advisors do more selling than advising based on the revenue and profits that such selling generates. Choose a financial advisor who has your best interests at heart before you make a sizable investment with any manager. Your objectives may be totally incompatible with the plan you’re shoehorned into. Make sure that this doesn’t happen by assessing the firm’s business model.
Who Is Investing?
Ask who specifically is investing the money as this person may vary from company to company. You need to know who’s handling your money before you can hand it over with confidence. Some advisors may be more relationship managers versus actual investors. If the advisor isn’t making investment decisions find out the person who is choosing how to invest your money. Advisors who are growing business are many times not doing the actual investing. If the individual won’t be handling your account over the long run it’s time to look for a different financial advisor.
What Documentation Does the Firm Use?
Check out reporting and documentation to ensure you’re dealing with a transparent advisor. If the firm is legit you should have ample information to make an informed decision based on their performance. Demand a customized report listing your risk tolerance and objectives. You need to know how your investments are doing by having access to the proper reports and documents.
Does The Advisor Provide Specific Services?
Financial advisors should provide a range of specific services to meet your investment needs. Does the advisor provide full and comprehensive financial planning? Or perhaps the professional focuses only on money management. Get clear on how the financial advisor can help you before you work with a firm. If you know their role you can better make your decision. It always helps to know exactly who you’re dealing with and how they can assist you to give you greater confidence in the individual’s investment skills.