Investing 101 — How to Choose a Financial Adviser

by Jamie Dlugosch | March 15, 2012 6:00 am

Do you still think going it alone makes sense in this crazy market environment?

Bond yields are sinking, stocks are in full retreat and gold reversed course. The crosswinds are blowing hard, making it difficult to navigate the markets. The key to success is a disciplined plan implemented and managed by a professional financial adviser.

Once you have made the choice of working with a professional financial adviser, the next step is finding the right one for you. And there are many factors to consider.

Choosing a financial adviser is an intimately personal decision, so take care before making a final selection. Interview and meet with at least potential potential candidates, and preferably as many as five.

That might seem like a lot of work, but at the end of the day, the time will be well spent.

Hunt candidates by asking friends, family and co-workers for referrals. If those closest to you are happy with their adviser, you might be, too.

Next, use the Internet to help you find potential advisers. Look for articles about local advisers, or even better, articles written by local advisers. Sometimes the best advisers are those quite visible in the community. Seek them out during your search.

Once you have a pool of prospective advisers, the search then turns to specifics. Gather as much information as you can about the advisers. What fees do they charge? What is their investment philosophy? How accessible is the adviser to clients? What is the adviser’s performance history?

Some advisers do more than others. If you require a detailed financial plan, make sure your adviser will help you. Also find out if the adviser can help you with insurance products. Things like life insurance, annuities and long-term care products are complex. Make sure your adviser is well-versed in such things.

Finally, it is time to make a choice. If personal preference is most important to you, pick the adviser you feel most comfortable with. A better option would be to take emotion out of the choice. Go with the adviser you think will best get you from point A to point B based on the information you gathered.

Whatever you do, take your time. While it is easy to fire an adviser, making the right choice at the start will pay off for you and your portfolio over the long term.

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