Wednesday, May 29, 2019

How To Pick a Financial Adviser



Picking out a financial adviser should be a careful, thoughtful process. This is the professional you trust to help you navigate your wealth building efforts, after all. That means you need to be sure they are properly credentialed and their performance is within the norms of their role. 

Finding that information in the right regulatory database is not difficult, and with that info will come any complaints or disciplinary action summaries that might be of use to you. 

There are a lot of advisers with no problems on their record who just wind up being incompatible with certain investors, though. So how can you tell which of your potential advisers will be the best fit for you? You need to do some research and dig deeper.

Check Out the Adviser's Firm


Whether you're looking at someone who works alone or an adviser at a large firm, there should be some electronic records or even a company landing page online. This will give you a chance to see what professionals say about themselves, their goals, and their approach to investing. 

Some firms even make a point of including a mission statement and other information about their underlying philosophies in their online company information. These resources also typically outline the kinds of investors they work with on a regular basis and the kinds of investments they are most informed about.

Reviews By Investors


Other resources about the firm might be available through other online resources like reviews as well. Also, consider whether you want to work with advisers within brokerage firms or RIAs who work totally independently. There are important considerations to make as you read each one. 




Check for reviews of the firms overall, but also read any reviews you can find about the adviser you specifically want to work with. Every organization has its stars and its specialty players, after all, and you will want to know how your adviser fits into the bigger picture in an organization.

Other Resources To Consult


Beyond review sites and the online resources placed by the firm for customer education, you can also check out resources like the Securities and Exchange Commission's information page about financial advisers and how they are regulated. These background resources fill in the information you need to make sound judgments about the firms and advisers you consider. By looking for more neutral information sources, you gain perspective on:
  • Industry norms
  • Recourse for dispute resolution
  • Common issues investors encounter
  • General strategic advice for new investors

The best thing to do is to fold this stage of research into the beginning, middle, and end of your process, so you are researching these factors ahead of your first look into potential advisers and throughout the process. This will allow you to keep checking out fresh viewpoints and considering new angles on your decision-making process.


Brokerage Firm Advisers or RIAs?


Whether you are working with a planner or adviser based in a brokerage firm or an RIA, there are advantages and disadvantages to consider, and you need to understand them before making that final choice. 

Many new investors work with advisers based in their brokerage firms, but those with large accounts or a fair amount of experience often opt for an RIA when looking for advice. If you're not sure which to go for, researching the differences in their approaches and the advantages of each kind of adviser will help you get started.

Don't rush this decision, because while you can always change advisers if you need to, you will have to go through a similarly thoughtful process to make a good decision if you do. That means rushing into a relationship with an adviser that doesn't quite work out could cost you more time than just being thorough and deliberate the first time.


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