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Finding a Financial Advisor – Where to Begin?

Dec. 30, 2012
Personal Finance
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You work hard for every penny you earn, and the last thing you want is to lose some of your hard earned savings to a bad investment or poor money management decision. Getting your finances in check can be overwhelming at times and sometimes it’s okay to get a second (or third) opinion from someone who isn’t your best friend or family member. This is when a financial advisor might be a good option for you.

Here are some things to consider before committing to an advisor.

1.      Make a List

We all have different priorities in our lives and it’s important for us to recognize what matters to us when it comes to financial advising. Do you have kids? Are you saving for their college education? Are you looking to buy a home? Do you want an advisor to manage your investments? Are you thinking about retirement? Making a list of what’s important to you, as well as jotting down any questions you have for a potential advisor can help you focus on your search.

2.      Know What You’re Looking For

Once you’ve made a list of your top priorities, start thinking about the areas of expertise you want your advisor to have. Will he or she be a Certified Financial Planner or a Registered Investment Advisor? Both? Neither? You might not know what those designations mean, but check out online resources to learn more. Finding a financial advisor is like buying a car – don’t settle for the first one you see, and don’t show up at a dealership just to browse. Have an idea of how much you can pay, what your needs are, and what you want to get out of the relationship before you start interviewing advisors.

3.      Do Your Research

With so many resources at your fingertips, it’s up to you to do your homework. Google potential advisors and see what you can learn about them from what’s online. FINRA and the SEC are large federal regulators who oversee some financial advisors. You can check to see if those advisors are in the publically available FINRA/SEC database for regulatory actions.

4.      Take Recommendations

Network with your friends and family to see what their experiences have been with financial planners. Do they have someone to recommend in your city? What do they like about them? What would they change? Pick their brain to find out where they succeeded and where they might have changed things in their search to help you with your own.

5.      Have an In-Person Meeting

This might sound like a no-brainer, but it’s important to meet with the advisor in person before you agree to any business relationship. While pre-meeting phone conversations can be useful and still give you lots of insight into your working chemistry, it’s always important to meet them in person.

7.      Trust Your Gut

Finding your perfect financial advisor is a lot like dating – so it’s crucial to go with your gut. If you feel good about someone, that’s a good sign, but if someone comes off as too aggressive, pushy, or just doesn’t give you a good vibe despite what his or her credentials suggest, it’s okay to pass. It’s your money and your life so stand by what you believe in.

8.      Keep in Touch

Once you’ve found the advisor for you, keep in touch throughout the year. Life can throw you curveballs and the plans you have in place one year might change completely the following year. You might get married; find yourself with a baby on the way; or dreaming of going to grad school; or retiring. Meet with your advisor regularly to see if what you have set up is still aligned with your most current priorities.

Happy hunting!

Interested in learning more? Visit NerdWallet’s Ask an Advisor.