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QUESTION:
Things to consider when hiring a financial advisor
Here are some things to keep in mind when choosing a financial advisor: 1) Go with a fee only advisor, since you want to avoid conflict of interest issues. Fees can be hourly, a percentage of your portfolio's value or an annual retainer. - Some advisers get commissions on the investments they sell. This gives them an incentive to have their clients trade and buy high-commission products. 2) Choose an advisor with the right certification - one who is at least a certified financial planner, or CFP. Even better would be someone who has qualified to be a chartered financial consultant, chartered financial analyst or certified public accountant-personal financial specialist. Today anyone in the US can call themselves a financial planner, no certification is required - so you should look for someone qualified. 3) Find an advisor who will uphold the standard of acting as your fiduciary, meaning they will recommend products that are best for their client (you). At some large firms fee-based advisers often aren't considered fiduciaries, instead a lower "suitability" standard is used, which means they can recommend products that are only a "reasonable" option for their clients. 4) Look for an advisor that takes a holistic look at your situation - beyond picking investments like stocks, funds and bonds you may also want someone who can help with insurance, mortgage, taxes, college costs and retirement & estate planning. 5) Make sure that you get the right value for the fees you are paying - many advisers charge 1% of a portfolio's value each year. With fees also charged by the products you buy - you might be paying up to 2-3% a year, so your annual return could go from 7% (average S&P return) to 5%...quite a hit and you might be able to make that just by putting your money into safe fixed income investments yourself.
	asked by SilverSurfer, 7/9/2006
Categories: Tax Planning, Financial Planning for Retirement, Financial Advisors, Retirement Income, Estate Planning, Pre Retirement, Retirement Investing

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