5 Tips for Choosing an Investment Advisor

Choosing an Investment Advisor

financial advisorInvestment advisors are plentiful these days.  If you have money, people are full of ideas on how to use it.  However, there are some things you need to look out for and other things you need to be sure of.  Anybody can give their two cents, but you need to deal with a pro when it comes to crafting the financial framework of your life.


Look for Certifications

All investment advisors need to have some kinds of certification.  For example, insurance licenses, being a certified financial planner and brokerage licenses are great to have.  Without certifications, you’d likely do just as well talking to your parents and older friends about what they wish they’d done.


Ask for Experience

Ideally, you want your advisor to be experienced.  While being educated is important, nothing can take the place of hard-won experience.  For example, you should know how your advisor dealt with the panic of 2008, and how they advised their (understandably) panicking clients during that rough patch. Does he have experience with both offline and online accounts, like those offered by www.ufxmarkets.com?  While it’s okay to take a chance on a young advisor, more experienced ones often charge no more for a much broader level of experience.


Check the Advisor’s Background

Background checks are required for many kinds of licenses, so they’re public records.  Checking in on your advisor will tell you if they have ever done anything shady or illegal.  While most advisors are trustworthy individuals who want to help you, it only takes one who isn’t on the level to cause you a lot of harm.


Know How They’re Paid

Some advisors are paid commissions on products they sell you, while some others work by the hour on a fee basis.  While there is nothing wrong with either type of compensation, keep in mind that advisors are working for their money; they will tend toward actions that get them paid.


Ask Them to Define Some Terms

If your advisor defines terms like “diversification” or “asset allocation” with a bunch of jargon, don’t use the person.  A person who understands a term can explain it in ordinary words, and make it understandable to just about anyone.


A financial advisor is a great person to speak to if you have any questions about how well you’re doing financially.  If you see a financial planner only a couple of times during your life, the differences can end up being incredible.  You just need to follow all of these tips.

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