How to Check Out a Financial Advisor
by Chuck Jaffe
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.
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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.
Here are some questions that will help you determine which advisors in each specialty are right for you.
Editor’s Note: Portions of this article were excerpted with permission of the publisher, John Wiley & Sons (www.wiley.com), from “Getting Started in Finding a Financial Advisor,” by Chuck Jaffe. Copyright 2010 by Chuck Jaffe.
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Discussion
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.
posted about 1 year ago by RICK from Nevada
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.
posted about 1 year ago by William from New Jersey
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?
posted about 1 year ago by Ronald from Texas
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.
posted about 1 month ago by John from Virginia
