Selecting a Finanical Advisor is an Extremely Important Decision
A great financial advisor can benefit you and your family for generations to come, while a poor selection can be devastating. You and your family may be working with this advisor over the next 10, 20, or 30 years plus. The advisor can have a substantial impact on the quality of life for you and future generations. How can you choose the right one?
While much is written about choosing the right investment, very little is written about choosing the right financial advisor. And yet an advisor can have a much greater impact than any single investment choice. If you were interviewing a potential advisor, how would you go about selecting that person?
Would you go in blind to the interview and wait for the financial consultant to sell you? Wouldn't it make more sense to put together a list of questions to help determine if they are the right person for you and your family before you hire them?
But what questions should be asked? What questions will separate competent advisors from product pushers and transaction junkies? What questions can help you land the great advisor in a sea of average (or worse) professionals?
Based on my experience as a financial advisor, I have developed a list of questions to help you sort the real deal advisor from the many pretenders that operate in the financial services industry.
To use the list properly, I recommend rating the advisors you interview on a scale of one to five on each question you ask. Then, total them and score each advisor. That will help to narrow down your list of candidates and help you to make an objective decision. If you are making a decision with your spouse or someone else, each of you should score the answers individually to get an accurate score for each of you and then combine them.
One final note. Be careful not to make your decision based on emotions and sales techniques. If you have a feeling in the pit of your stomach and feel uncertain, you need to take more time. By simply telling the advisor you need more time, you will learn more about the advisor. If they have your best interest at heart, they will honor your request. If they apply pressure, get upset, try to scare you, or pull back the offer, you should be concerned. Use the scorecard technique I outlined to help you make a great decision.
If none of your potential advisors scores well, don't give up. Keep up the interview process until you find the right advisor for you and your family. It's one of the most important “hiring” decisions you will ever make.