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The 5 Do’s And Don’ts When Hiring A New Financial Advisor

There’s no shortage of people who advertise themselves as “Financial Advisors” out there. How do you choose one who knows what they are doing? And how do you choose one that you trust to listen and represent your future goals?

It’s a catch-22. if you are hiring an advisor to help you with your finances because you don’t feel confident, how are you going to feel confident about choosing the advisor that will work best for you?

There’s no shortage of people who advertise themselves as “Financial Advisors” out there. How do you choose one who knows what they are doing? And how do you choose one that you trust to listen and represent your future goals?

Firstly, don’t overcomplicate things. Many advisors actually invest your money in a similar way as you would envision. A good personality match is almost as important as the specific investing strategy your professional uses.

The 5 Things You Must Talk About

1. Do:

Ask the advisor to explain their investing strategy to you. You don’t have to understand the nitty gritty details, but what they are saying should make sense to you and sound like it fits your situation.

If someone is using a strategy that is so complicated that they cannot explain it in layman terms, it may not be the best fit. It is also worth asking how they are compensated by managing your wealth.

2. Don’t:

Don’t be embarrassed to ask questions. Part of an advisor’s job is to educate you about your investments and why you hold each of your individual positions. If someone is not comfortable explaining why a particular investment is best for you, that’s a red flag.

3. Do:

Take notice of how they talk about the market and day to day fluctuations. Does it sound like they are timing the market or trying to chase the most recent hot stock? You want to focus on long-term investing and trying to outperform the market is not successful in the long-term.

4. Don’t:

Don’t allow yourself to be talking into something that you are not sure about. If it feels like you’re being sold something, you probably are. There is no “free lunch”.

There’s no magic formula for investing returns. Consistency and patience are the long-term winners with investments.

5. Do:

Work with someone you like, you don’t want to dread meeting with your advisor. There are thousands of advisors out there. We are all meeting in a more virtual environment these days. If you can’t find someone locally that you click with, explore some advisors in other areas who are willing to meet remotely.

It’s also worth investigating the differences between the needs of women and men. Research has made it clear that women face drastically different sets of challenges than men when it comes to financial and retirement planning.

According to a 2017 survey by the research and consulting firm Cerulli Associates, only 16% of financial advisors are women! Men and women often have very different life journeys and it might be helpful to work with a woman that shares insight into your special needs.

The Right Advisor is Right For You

Today, it’s more important than ever to ensure your advisor has your best interests at heart. A Fiduciary is someone who will do what is best for your situation, not just what is best for their pockets. Your advisor will be one of the most important professional relationships you have.

Make sure you spend time choosing the right person. If your advisor is sitting on your side of the table, you can be confident that everything they are doing is for your benefit, and not for theirs.

Have more questions? We would love to help you on your financial journey. Don’t hesitate to reach out to our team with any questions.

About the Author

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Carol Bell

SENIOR WEALTH ADVISOR, CFP®

Carol Bell, CFP®, has been working in the financial industry since 2007 and joined Better Money Decisions as a Senior Advisor after working for Charles Schwab, Inc. and Vanguard. Her undergraduate degree in Psychology is from Arizona State University and she has a Master of Business Administration degree from the University of Phoenix. Carol specializes in helping clients understand their investments. She is not just a financial planner and investment manager, but loves her role as a financial coach and cheerleader. A native of Arizona, Carol lives in Phoenix with her husband and two children. They spend a lot of family time outdoors- hiking, taking trips in their camper, and visiting national parks.

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