You’ve been managing your own retirement savings and have been pretty happy with your investment decisions. However, the task of going it alone is becoming a little overwhelming, so you have decided that it’s time to seek the services of a financial professional.
Deciding to hire a financial advisor can be a tough decision for many individuals.
There are approximately 310,000 financial advisors in the United States. If that’s not confusing enough, there are over 200 designations (i.e., “financial consultants,” “wealth managers,” “financial advisors,” “investment consultants,” “wealth advisors,” … etc.) for financial advisors.
With so many financial advisors and designations to choose from, how can you decide which financial advisors are looking out for your best interests, as opposed to their own? The good news is that you don’t need to know the differences between all of the designations and titles of financial advisors in order to choose a financial advisor. You just need to know what to ask them. The following 10 questions can help determine if a financial advisor is looking out for your best interest.
Are you legally required to always do what is in my best interest?How will you determine my asset allocation?How often will my investment accounts be reviewed and rebalanced?Will my money be invested in actively managed funds or Index Funds?How much will my mutual fund fees and expenses cost in actual dollars?Are you a fee-only, fee-based or a commissioned based financial advisor?How much is your investment management fee?Can you receive commissions?How do I pay for your services?Have you ever been disciplined for illegal or unethical behavior?
You should never feel guilty or intimidated about asking these questions. Whenever I meet with a potential new client, I tell them right up front that any all questions they have for me are “fair game”. The bottom line is that a financial advisor works you, and you have the right to ask these questions and every financial advisor should have no problem answering them.
If you’re not completely satisfied with the answers you receive, or don’t receive, don’t hesitate to keep searching.
After all, there are still another 309,999 financial advisors to choose from.
Martin Krikorian is President of Capital Wealth Management, a “Fee-Only” registered investment adviser located at 9 Billerica Road, Chelmsford MA. He is the author of the investment books, “10 Chapters to Having a Successful Investment Portfolio” and the “7 Steps to Becoming a Better Investor.” Martin can be reached at (978) 244-9254, Capital Wealth Managements website; www.capitalwealthmngt.com, or via email at, firstname.lastname@example.org.