By Sherrie Morgan, Director of Marketing & Public Relations
More consumers are turning to financial advisors to help them pave the way to a secure future. But how do you know who you can trust? Here are five positive signs to help guide your decision on choosing the best person for the job.
You understand the fees
If you’re aware of how much you’re paying your financial advisor, it means you’re dealing with someone who believes in transparency. Some earn commissions based on investments they sell, while others earn a fee calculated as a percentage of assets under management. It’s important your advisor is “completely open” and honest with you about the compensation structure. Many prefer fee-based advisors because the fees can sometimes be linked to an accounts’ performance. When you do well, your adviser does well.
You understand the risk involved
Investments typically involve some degree of risk and most always the higher risk leads to a higher reward. But an advisor downplaying risk is not doing a diligent job. A good advisor talks about what you could encounter. They will also run numbers showing what you stand to gain and lose in different market scenarios.
You meet on a regular basis to review your portfolio
Don’t settle for meeting with an advisor who is only looking to push new investments. A trustworthy financial advisor will proactively invite you to talk about your investments, their performance and any go over any concerns you may have.
You’re getting educated about investing
Financial lingo can be challenging to wrap your head around. However, an advisor who may sound financially well-versed does not always make them reliable. A good advisor will explain options in detail when trying to sell a certain stock or mutual fund. They’ll also encourage you to learn more on what each one entails.
Your goals are remembered
It’s your financial advisor’s job to know and care about your “personal goals” and a create a financial plan focused on achieving them. It’s a sign they’re listening and want to work with your best interest in mind.
These steps can help give you peace of mind that you’ve selected the best financial advisor. They should be someone you can always turn to for guidance and assurance your assets and financial growth are in the best hands.