What things should be taken into consideration when hiring a financial advisor?
- Fees: Some charge an hourly fee, some charge a fee based on percentage of assets under management, some get paid commissions for products they sell. Only you can determine which is right for you or whether you feel a particular mode of compensation aligns your needs with the advisor’s.
- Is the advisor a fiduciary. A fiduciary needs to invest with your best interests in mind. A non-fiduciary only has to sell a product or investment that is suitable which may or may not be in your best interest.
- Who is the custodian of your funds. A financial advisor should never be your custodian. They should be parking your money with a reputable broker that is licensed in your state and with the major federal agencies.
- What are their credentials. Some, like a CFP, require significant training and experience and a difficult test (as well as required continuing education to maintain the designation) to obtain the designation and some are a brief online course that can be done in a few hours.
- How long has the professional been providing financial advice.
- Has the professional every been disciplined? There are several sources to check to see if the professional has ever had issues with integrity or honesty.
- What is your philosophy on money management? Beat the market? Low risk? Low expense investments? Hedging? Make sure their investment philosophy works with your needs and comfort level.
- How often will you communicate. Are you paying less for less service? Will you be communicating a certain number of times per year? How much hand holding do you want/need/are willing to pay for. As much a financial therapist as a technician, a financial advisor can be many things. Make sure the person you hire is the type of advisor you need.
- Where do I fit in your client base. If your advisor has mostly clients with $3.0 mil or above in investable assets and you have $500,000.00, will you get the attention you need? Or if your advisor mostly spends his time selling insurance products on smaller accounts to generate commissions will she have the time to oversee your larger investment portfolio or have the right skillset.
About The Author
Robert M. Slutsky has practiced Elder Law since 1992 and was one of the area’s first elder law attorneys. Rob Slutsky advises clients on Medicaid and Asset Protection Planning, Guardianships, Wills, Trusts, Powers of Attorney, Estate Administration, Special Needs Planning and General Estate Planning. He has represented for profit and non-profit elder care providers and the Pennsylvania Department of Aging. Rob Slutsky has been the solicitor for the Montgomery County Office of Aging and Adult Services, the Area Agency on Aging for Montgomery County, for more than 15 years.