Things To Consider In Finding A Financial Advisor

2007-11-09 05:11:17

( Business )



One of the most effective ways in finding a financial advisor is by referral. However, whether you get the referral through a friend, a colleague, a family member or a neighbor, you must be aware of some important considerations before you finally entrust all your investment assets to a single advisor.

Credentials

When finding a financial advisor, make sure to deal only with the one who has proper credentials. The industry of financial services is actually more complex and constantly evolving. There are hundreds of thousands of financial professionals, and so many financial products that you can choose from. For this reason, government agencies and professional associations have drafted specific licensing requirements necessary for a person to engage in the profession. Hence, in your quest to finding a financial advisor, narrow down your choices only to those who are licensed to practice the profession.

Experience

In the process of finding a financial advisor, experience is the most important quality that you should keep in mind as you seek ways on how to find a financial advisor who can help you achieve your financial goals. To evaluate the experience of financial advisors, you can look at their track records.

You can ask advisors to show you the history and track record of the asset managers they use along with performance data on actual accounts, albeit keeping the client names and personal information confidential. They should be able to present the annualized performance, their recommendations on asset allocation, the strategic decisions taken in response to shifts in the market or the client's objectives. They should also describe how they handle client issues.

Although referrals are a big help in finding a financial advisor, do not merely rely on that. You must find a financial advisor who understands your financial objectives and prioritizes your interest ahead of the advisor's pecuniary interest.


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