How to Pick a Financial Advisor
We all work hard to earn our money and we want to manage it as best as we can to achieve our financial goals in life. Sometimes the best way to do that is to hire a financial advisor. There are short term goals like making our rent or mortgage payments, providing food and clothing for our families. Then there are long term goals like purchasing a house or automobile, paying for a wedding or a college education, and even for retirement. Balancing these goals and keeping abreast of all of the opportunities out there, as well as changes in the tax law and securities law, can be almost a full time job.
To find an advisor who you can trust and who gives you confidence that they can help you achieve your goals, takes preparation on your part in determining exactly what type of help you are seeking. If your finances are completely disorganized, you will need to engage a financial planner who can look at what you are doing and then rearrange everything to get it on a course to meet your goals. Assemble your tax returns, a list of your current assets and liabilities, bank and investment account statements, and your checkbook. A good advisor will go over all of that data to see how you are doing and where there may be opportunity for improvement.
Understand your goals and be able to communicate them to a potential advisor. Also be up front about your risk tolerance. Over time reward tends to be proportionate to the amount of risk you take. A single person just responsible for him or herself may be more risk tolerant than a married individual responsible for providing for his or her family.
Learn what the advisor will cost you and the exact scope of the work that they will do for you. Advisors can take fees from you or from the companies in which they place your investments.
