What to look for in a financial advisor


I’ve seen a number of articles lately directing consumers toward finding the lowest cost investment, often without regard to performance or whether it’s a good fit for their portfolio.

While it’s important to be conscious of fees, it’s just as important to have a financial planner at your side looking at the whole picture. The key to successfully choosing an advisor is to find one who knows and understands your situation, including your financial dreams, needs, and goals; and can make appropriate, fitting recommendations to help you achieve them. Require they meet with you regularly to review your progress and make adjustments along the way. Similarly to life itself, Financial Planning isn’t a project, it’s a journey.

Below are a few tips to consider when looking for a financial planner:

  • Check credentials — look for an adviser who is a Certified Financial Planner (CFP). This means they are licensed and regulated, in addition to participating in mandatory ongoing education on different aspects of financial planning.
  • Look at the payment structure — a planner who earns money based on commission rather than an advisory fee or hourly rate could have an incentive to steer you in a certain direction. Look for a planner with a fee-based payment structure.
  • Do your homework — read the code of ethics to which your financial planner adheres. Look for the word “fiduciary” and language that requires planners to look after your best interests.
  • Beware the “crystal ball”— if during your initial meeting with a prospective advisor, they at any time make predictions about market-beating performance, you should walk away. No one can make such guarantees, and a planner who is trying to, may be taking risks you don’t want to take.
  • Ask around — as with many things in life, sometimes it’s best to get a referral from a friend or family member. If they’ve found someone they trust and who they believe is working in their best interest, they might also be a good fit for you.

Overall, when looking for a financial planner that will best meet your needs; remember, just because it may be the lowest cost option, does not mean it’s the best fit for you, or that it will perform any better.

Disclosure: Mokosak Advisory Group is a fee-based financial coaching firm. 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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