Choosing the Right Financial Advisor

Before you open your phone book, decide whether you will need a financial advisor. If you are unemployed or have no assets you may want to first focus on the basics of personal money management like paying bills and budgeting. If you believe you may take advantage of hiring a financial services professional, there are numerous things you will need to consider.

To begin with, it is very important to know the differences between financial services professionals: insurance agents, fee only planners, financial advisors and brokers. Insurance agents will be able to market you insurance, annuities and maybe some proprietary mutual funds. Brokers are merely a link between you and the marketplace: they could buy and sell certain instruments for you personally and earn commission, but they may care less about your financial picture as a whole. There are certainly a handful of forms of fee only planners as well: those who charge a fee on the basis of the assets under management and those that charge a fee for creating comprehensive financial plans due to their clients. A word of caution: many insurance agents, brokers and even debt relief specialists call themselves financial advisors. Only individuals holding a series 66 license are true financial advisors.

Secondly, you'll need to verify advisor's credentials before allowing him or her to complete any benefit you. Start by asking your prospective financial professional how long he or she has been in business, what licenses he or she holds in your state, whether or not he or she's any advanced certifications such as CFP, ChFC or others. Your advisor must have series 7 and 66 licenses plus a Life/Accident/Health license. College education is certainly not indicative of the amount of expertise an economic advisor possesses although a college degree is preferable.

Another important aspect of 

choosing a financial advisor is analyzing their industry affiliations. In simple terms, would you he or she work for? Even independent financial professionals need to be connected with a particular broker-dealer to manage to trade securities and with a number of insurance companies to have the ability to sell insurance products. Be sure to take a quick look at these companies' financial condition and reputation.

Additionally you need to look at his / her office during the very first visit. Are you currently confident with how a staff treats you and with how your prospective advisor treats the staff? Does he or she respect confidentiality or is there other clients' files piled up on the ground?

Feel free to ask questions: you're there to interview the financial professional. Ask if he or she has a mission and vision statement, what his / her ideal client is, how often you are supposed to see one another in confirmed year etc. This technique can help you figure out if you're a great fit.

Last although not least, watch for the follow-up. Professional financial advisors will give you house with a little material about them, their company, the services that they give and some type of pricing information. They'll usually send you a many thanks note and call you in just a week or so to see if you are ready to start working together with them