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How to Find a Good Financial Advisor

Updated on July 28, 2013

Finding a good financial advisor or financial planner to help you with your investments can be somewhat intimidating and depends on your personal situation. Many advisors specialize in certain areas such as Estate Planning, Retirement Planning, Investment Portfolio Management, etc. When you determine what investments you're looking for, you can then focus on an advisor who specializes in that area. Follow these basic steps to find a good Financial Advisor and make the process easier.


Listen and learn from others. First and foremost is a referral from a trusted source such as a friend or family member who has similar needs as you and has had a positive experience with their investments and the advisor they're recommending. You can also Google search advisors and interview a few from your area via phone before meeting.


Don't be afraid to ask questions about investing. Most, if not all advisors, will offer a free consultation to discuss how they can help you with investments. This is your chance to interview them in person and ask questions.


Go to (see links) to get a background check on the advisor or independent advisor and see if he/she has been sued or has any client complaints against them. Obviously, if the advisor or financial planner has several complaints for unsuitable investment recommendations, you don't want to entrust your money with that person. Just because an advisor works for Merrill Lynch, Smith Barney, or any other large brokerage firm, (see links), doesn't mean the advisor has a clean track record. Stay away from an advisor who claims he/she specializes in all areas of financial planning. It's very tough to be an expert in so many areas of investments unless working with a team.


Find out key information: what is the advisor's professional background, including how long they've been in the business and how long have they've been an advisor specializing in their area of expertise? What did they do before? Were they a car or pharmaceutical salesperson, etc. before entering the financial field? How are they compensated? Do they charge an annual fee based on assets under management or financial planning services? Do they work off commissions? Is there a potential conflict of interest in the way they are compensated by you? Are their financial interests in line with yours, and most importantly, how are they going to help you achieve your financial goals?


Ask what they can do for you. Most advisors focus on financial planning, but these plans are only as good as the portfolio supporting them. You might have the most comprehensive plan in place, but if your assets go down 50%, the plan means absolutely nothing. Managing and protecting the investments in the plan are more important than the plan itself. How is the advisor going to manage your assets? Mutual Funds, stocks, bonds, etc.? Will you be put in a cookie cutter investment program where the advisor is just a middleman and makes no recommendations or adjustments, or will the advisor actually provide investment advice and guidance? This is one of the ways of determining the answer to the all import question - Advisor or salesperson?


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