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Time and effort is necessary to seek out the right financial advisor. This list of characteristics can serve as a checklist when you’re looking to hire one.
1. They are a Certified Financial Professional
A legit financial planner should have some sort of highly valued certification. Perhaps they are a Certified Public Account (CPA), Certified Financial Planner (CFP), or a Chartered Financial Consultant. Ensure that they show you their credentials and then verify the credentials with the respective organization.
2. They are Patient with their Advice
A financial planner that calls you with urgent hot stock picks does not have your best interests in mind. There should be no sense of urgency when it comes to sound investing that leads to long-term growth.
3. They Charge an Hourly or a Flat Fee
Don’t get into a situation where you are paying a percentage of your managed assets or a commission on products bought to a financial adviser. Planners have four pay structures: hourly, flat fee, commission from products sold, or by % of assets managed. If they manage your assets, you are prisoner to their long-term strategy.
4. They Educate you
Your financial planner should want you to know as much as they know so that eventually you can manage your own finances. A financial planner that withholds information or doesn’t take the time to teach you the basics is not a good one.
5. They Care About more than just your Investments
A good financial planner is going to invest the time to take a holistic look at your spending habits, debt obligations, life goals, and more.
6. They Invoke Genuine Trust
If you don’t trust your financial planner, it’s not going to be a good business relationship, and there are plenty of other advisers out there you can always choose from.
7. They have Never Been Disciplined by Any Regulating Authorities
Check with regulating authorities like your state’s insurance and securities dept. to make sure that your financial adviser does not have any black marks against them.
8. They have a Good Reputation
You’re not always going to be able to find a good referral. Just be careful of a hot shot planner that has had a little short-term success in managing your friend’s investments.
