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Advice on Picking a Financial Advisor

by glenn on October 13th, 2012

If you are looking for financial advice there are many people who specialize in this field and can help you manage your money. There is no shortage of experts in the field of financial advice, but the trick is finding the right match for your needs. The kind of financial advice that is most beneficial for you and your circumstances depends a great deal on what is going on in your life. People often seek professional financial advice during times of transition such as a divorce, birth of a baby, marriage, or retirement. Each of these events requires advice from someone familiar with optimizing financial assets during this time. Financial advisors comprise a whole field of experts ranging from stockbrokers and bankers to life insurance agents and independent planners.

Picking the right financial advisor for your needs is one of the most important decisions you can make for your financial well-being. Finding the right advisor can be very tricky because you are forced to navigate hidden fees, potential conflicts of interest and industry jargon. Before picking an advisor there are several things to consider. You should know what you want to achieve before tackling the task of finding the right one. You should also consider what kind of help you require. Someone with modest means and straightforward financial goals will not require the degree of help required by someone with large financial assets and complex planning needs. Among the various types of paid advisors there are those who can help with budget planning and creating an overall financial plan, while others are suited to making investment recommendations. There are advisors who can handle both of these types of financial advice.

Plan on interviewing several candidates and check out their qualifications at the Financial Industry Regulatory Authority database. Another option is to check the public disclosure site provided by the Security and Exchange Commission. Another good option is to ask friends and family for their recommendations, but never put your trust in an advisor simply on that basis. Credentials are important but do not always indicate the competence of the advisor. There are a myriad of credentials floating around that many advisors use to impress their clients. The only credentials that really matter are the ones that designate the planners as a Certified Financial Analyst or Certified Financial Planner. These designations are only given to advisors who have passed stringent tests.

Pay attention to the fee structure charged by the advisor. Make sure to ask advisors what kind of compensation they receive. Many advisors and brokers sell products that are commission based and this fact will tend to color their advice. If using this type of pay structure be sure to ask the advisor to sign a document that requires them to accept fiduciary duty for your account. Doing this puts them under legal duty to place your interests before theirs. A better option is to choose a financial planner that charges flat fees for services rendered. Some advisors are paid hourly, while others are paid on a percentage of your assets. It is still important to make sure that there are no hidden charges and the only fees they take are actually from you. Anyone interested in more financial information may wish to visit and see what they have to offer.

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