How to Check Out a Financial Advisor

by Chuck Jaffe

How To Check Out A Financial Advisor Splash image

You would think figuring out who to turn to when you need financial help would be as simple as telling yourself, “I’m having trouble figuring out the tax code, so I need an accountant.”

It doesn’t work that way. That’s because financial advisors often wear a lot of hats and do a lot of different chores. There are tax attorneys and accountants who do financial planning, and stockbrokers who also sell insurance. Throw in confusing titles—where you need to discern between a “financial planner” and a “wealth advisor”—as well as mind-numbing professional credentials, and it’s hard to find the right mix of skills in a person you want to work with.

To find the right match, first come up with the financial chores and tasks you want help with, and then match your needs to an advisor. And if an advisor does more than one job—a financial planner who also is a lawyer doing estate planning, for example—qualify them for each task separately. Don’t assume that because an advisor is best for one task that he is great for all.

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Chuck Jaffe is a senior columnist with MarketWatch. Through syndication in newspapers, his Your Funds column is the most widely read feature on mutual fund investing in America. Chuck has authored three personal financial books, including “Getting Started in Finding a Financial Advisor” (John Wiley & Sons, 2010).


RICK from Nevada posted over 3 years ago:

Where can you find an investment management company's performance over 5-10 years? Is there an advocate/company that measures this type of performance?

Today, many firms are "selling" managed accounts and/or private investment management accounts. FINRA, NASAA and other sites only go so far.

L from Maryland posted over 2 years ago:

I have the same question as Rick.

William from New Jersey posted over 2 years ago:

An "advisor" wanting to sell me a fixed annuity left me his card which showed the following notations: "NASD" & "SIPC", what do these signify?
Also, if fixed annuities enanate from insurance companies, would I be better off going directly to a licensed ins. broker rather than dealing with an independent advisor who claims there is no fee? Thanks.

Ronald from Texas posted over 2 years ago:

Does AAII have access to Financial Planner, Broker etc preformance data and complaints. Is so is there an AAII page we can look at for ratings to include Fidelity, Vanguard, Oppenheimer etc ratings for comparable stratgies?

John from Virginia posted about 1 year ago:

Are the any opinions on financial planners/brokers who collect a commission / sales charge vs. hourly rate?

I would love to see AAII host a performance / complaint database that members can contribute to and reference.

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