OK, you’ve made the decision. It feels great! You’re going to begin working with a Financial Advisor! But now, you have to find one. Where do start? What do you look for? How do you know that they’re trustworthy? What if you make a bad decision? Wow, it’s a lot of work. Maybe you’ll postpone this, and do it another time when you’re better prepared. Yeah, that makes sense, and it feels comfortable. Congratulations, you have just talked yourself out of it!
If this sounds familiar, that’s because it probably is. The selection of a Financial Advisor is an important one. But it’s not as grueling and difficult as many perceive it to be. In this author’s opinion, if you follow some basic, common sense rules, you should be able to easily make the decision and enjoy a very successful, educating experience.
FIND SOMEONE YOU LIKE
First and foremost (I almost hate to include this because it’s so obvious), you have to like the person. Find someone who you enjoy spending time with and talking to. Make it someone you could actually hang out with, someone who is genuinely appealing to you. Whatever criteria you use in this area of the selection process, now is the time to use it.
FIND A REFERRAL OR SOMEONE YOU KNOW
If you can, get a friend to refer you to someone they work with. This way, the Advisor is a known quantity and has an established track record with whatever attributes the person that made the referral feels they need to have in order to be worthy of referring out. Better yet, perhaps you actually know someone who you can work with. This makes the most sense for obvious reasons. Remember though that you will be establishing a business relationship in addition to whatever existing one you already have. Make sure this can be done.
FIND SOMEONE WITH TEN YEARS OR MORE EXPERIENCE
You need to find someone who has survived the high attrition rate associated with this industry. There are many reasons why they leave, but the important thing for you is to find one that hasn’t. Many Advisors you meet today will not be in the business two or three years from now. An Advisor with at least ten years experience has also most likely weathered a good and bad market. Let’s say you found a new Advisor back in the late 1990’s that had only a couple of years under their belt. They would have only seen bull markets, and have the feeling of invincibility when it comes to investing your money. And believe me, after the year 2000, and just after September 11, 2001, your new Advisor wouldn’t have the slightest idea of what just happened and how to handle all the panicked phone calls. And chances are, with only bull market experience, your Advisor you would have had you overly aggressive in your investing and as a result you would have suffered a serious loss. Besides, with 10 …