Whether it is your first time using a financial advisor, or whether you feel like it’s time for a change, it is essential that you find an advisor who feels more like a business partner. Finding the right investment advisor, however, may be harder than you think. When searching, be diligent, and stay away from the following misleading sources.
1. Asking Friends and Family:
Though your mom may love her financial advisor, chances are, you are in a very different position than her. She may be retired or even have a pension and you may be a new business owner with student loan debt. When it comes to the advise of friends and family, stick to things that won’t dramatically impact your financial future.
2. Asking Your Attorney or Accountant:
When it comes to your legal affairs, your attorney is a great resource, but when it comes to your financial future, think twice about asking a lawyer. Often, attorneys and financial advisors have established relationships and may strictly pass referrals to one another. Though the referral may be a great advisor, his or her expertise may not be in your best interest.
3. Using An Investment’s Firms Wealth Management Website:
Much like attorneys and advisors, investment firms have existing relationships with investment representatives. Additionally, while that investment firm may use an elite financial advisor, there is no guarantee that you will get that exact advisor when you contact the company. Chances are, that particular advisor is reserved for the elite clientele, anyway.
4. Using Brand Recognition:
Just because you have heard of an investment advisor’s company before, does not make that advisor the cream of the crop. Just like any huge company, there are some stars, but also many duds. When searching for an advisor, don’t put too much emphasis on name brand; instead, try focusing on quality of advice and trustworthiness of relationships.
5. Using Investment Magazine Ratings:
Though a high rating in an elite financial publication may be enticing when choosing an advisor, it is also misleading. Consider the fact that these ratings are based on more than client satisfaction. In fact, many are based on how much money the advisor brought into his or her own firm. As an alternative, find an advisor who is more worried about your financial health than bringing in the big bucks for his or her company.
6. Searching For “Fee-Only” Advisors:
In this case, you really have to put some thought into what is right for you. If you don’t trade often, then a “fee-only” advisor may not be necessary. The “fee-only” advisor gets paid no matter how much you trade, so consider whether this is required in your financial strategy.
For all of your financial and investment advising needs, feel free to contact Lowery Thomas, LLC today.