Here Are 7 Mistakes To Avoid While Selecting A Financial Advisor
Identifying and selecting a proper financial advisor is crucial to determine your economic direction in years to come
Research in the U.S in 2019 Northwestern mutual study identified that individuals under the guidance of financial advisor report “Substantially greater financial security, confidence and clarity thank those who go it alone”.
A promise of return by a financial advisor is legally prohibited, but while working with one research shows that profits can range between 1.5% to 4% each year.
We advise you to make use of some tools which will make you more comfortable to shortlist your financial advisor closest to you.
SmartAssers’ new tool allows you to identify and select the right financial advisor who undergoes a meticulous shortlisting process. All our Advisors are confirmed and registered with the U.S Securities and Exchange Commission (SEC)
and with the state regulator, we check if proper and valid licensing is present with the regulatory disclosures with in the past ten years
1. HIRING AN ADVISOR WITHOUT PROPER SCRUTINIZATION
It is always easy to hire a friendly, neighborhood financial advisor. Always take time to access your advisor for proper credentials and try to interview a few advisors, so you will select the one which suits you best.
2. TRUSTWORTHY ADVISOR
SmartAsset’s platform can make your life easy and help you choose your Financial advisor.
Always make sure your financial advisor is a fiduciary; by definition, a fiduciary is an individual who is ethically bound to act in another person’s best interest. This obligation eliminates conflict of interest concerns and makes an advisor’s advice more trustworthy.
3. IDENTIFYING THE CORRECT SPECIALITY OF THE ADVISOR.
Financial advisors can specialize in a few areas; some are experts in retirement planning and the others for high net worth business people. You can also find advisors who are suitable for family and professional planning
always make sure you identify the suitable candidate for your financial needs
4.CREDENTIALS
Make sure your financial advisors have valid credentials as they have to undergo tests to receive proper licensing. The analysis includes the Series 65 or series 66 and series 7. You can also find a bit more advanced advisor who comes under the category of a certified financial planner (CFP)
5. ALIGNING WITH YOUR INVESTMENT INTERESTS.
There are always different styles of financial advisors; some can be aggressive or conservative in the way of investing.
it’s still best to choose the person who aligns with your interests; for example, if you prefer investing in stock and your advisors want you to invest in bonds and index funds, this will cause a conflict.
6. HOW ARE THEY PAID
There are a few different payment structures of financial advisors. Some prefer percentages of your assets under management; some charge a flat fee no matter what the investment; some are paid commissions by mutual funds, which are serious conflict of interest.
if an advisor earns by not contributing to your interests, do not have them under your payroll
7.SELECTING AND ADVISOR
you might find several qualified financial advisors through reference or maybe in your neighborhood; however, it’s always a challenge to select the right one.
Find the right financial advisor for you is a simple no-cost tool that helps you find the right advisor with ease. You can find and get matched with up to three tested and licensed local financial advisors. The entire process takes a few minutes and can be life-changing.
