Walter Updegrave a contributor of Forbes has written a valuable article on tips to help you find the right adviser. Here at Financial Architects we understand the need and deserving for more than competent, honest and all round competitive financial adviser, so below please find the four tips provided by Walter Updegrave. If you finish reading and have any questions or are interested in investigating Financial Architects, please contact us directly on 0508 PLAN 4 U or alternatively click here.
1. Start with questions you need to ask yourself.
The adviser who’s the right fit for you can depend a lot on what kind of assistance you need. So before you begin your search for financial help, take a little time to ask yourself exactly what it is you want an adviser to do for you.
2. Do some due diligence.
Don’t be awed just because some adviser hands you a business card that has a long string of professional credentials. Fact is, so many organizations have issued so many titles and designations over the years — The Financial Industry Regulatory Authority alone lists 157 on its site — that it’s become a virtual mission impossible to separate the bona fide ones (such as the CFP and ChFC) from ones that are mere marketing gimmicks, or worse.
So do a little digging. A good way to begin is by going to the Check Out A Broker or Adviser section of the Securities and Exchange Commission site. There, you’ll find detailed information on how to research the background of brokers, planners and investment advisers, as well as links to regulators’ sites and other resources.
But don’t stop there. Before signing on with an adviser, ask the pro to be more specific about the products and services he or she will offer. Can the adviser mix and match investments from many funds or is there a restriction to a limited menu? Even if the adviser can choose from a large roster, does he or she primarily sell one type of investment?
The more you can find out about how an adviser makes a living, the better you’ll be able to evaluate whether that adviser is right for you.
3. Get details on fees and charges — in writing.
Advisers are usually compensated in one of three ways: they charge a fee for the advice they give (typically a percentage of assets under management that’s paid each year); they collect commissions for the investment products and services they sell or they get a combination of fees and commissions. A minority of advisers charge by the hour or work for a flat fee for specific projects.
4. Ask the adviser how he or she will manage conflicts of interest.
There’s been a lot in the press recently about the move to hold all financial advisers to a fiduciary standard — that is, require advisers to put clients’ interests first. That sounds nice. But in the real world, there’s always some way that an adviser’s interests may not completely square with yours.
For example, advisers who charge commissions may have an incentive to steer you to products or services that provide them with the fattest payout. Those who eschew commissions in favor of an annual percentage fee based on the value of assets they oversee may be tempted to keep that percentage fixed as the value of your portfolio climbs, even if they’re doing the same amount of work for you. Or they might be reluctant to put you into investments that may not be covered by their arrangement, such as CDs or annuities, and thus reduce the fee you pay.
So before signing on, ask the adviser to explain the potential conflicts and how he or she plans to manage them. If the adviser balks at this request or says your interests are perfectly aligned, move on to another one. There are more than enough worthy candidates out there.