Broker Check

What Should I Look For in a Financial Advisor?

| December 23, 2016
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  1. Fiduciary: registered investment advisors, or RIAs, and Employee Retirement Income Security Act-appointed fiduciaries must avoid conflicts of interest and operate with full transparency. Also, a fiduciary has a “duty to care” and must continually monitor not only a client’s investments, but also their changing financial situation
  2. Competence:  A good financial advisor should be well-educated, and able to demonstrate a significant amount of experience.
  3. Objectivity:  Your needs should be at the heart of all your advisor's recommendations. Your financial advisor should consider your situation carefully, then give you advice that best meets your goals. This approach may require your advisor to explain that your goals are unrealistic, given current resources and financial commitments.
  4. Integrity:  Trust is central to a successful financial planning relationship. You rely on your advisor's honesty, professionalism and abilities to achieve your goals. When you know your advisor takes her financial advisor duties and responsibilities seriously and places principles over personal gain, you can form a good working partnership.
  5. Clarity:  You advisor will also explain the risks associated with their financial recommendations, along with any potential conflicts of interest. For example, does the financial advisor gain personally or financially from your purchase of a particular product or from the outcome of a suggested strategy?  
  6. Diligence:  Before engaging you as a client, your advisor will discuss your goals and objectives and explain what you can expect from the relationship and financial planning services. A diligent financial advisor will reasonably investigate the products or services they recommend and closely supervise any staff working with you.
  7. Compliance:  Your advisor will not provide investment advice or stock brokerage services unless they are properly qualified and licensed to do so, as required by state or federal law.
  8. Privacy:  To get the best results from your financial planning relationship, you need to divulge relevant personal and financial information to your financial advisor on a regular basis.
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