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Choosing a financial advisor to manage your money can be confusing. There are varying opinions on the best strategies for different investors and how long to stay with an advisor. You may wonder what questions you should ask your potential advisor or if it is worth taking their advice since they benefit from the relationship.

This article gives you tips on how to select a financial advisor.

 

Find a real fiduciary

Fiduciary advisors have a legal obligation to put your interests first and understand the concept of your needs. A fiduciary has one client: you. Non-fiduciaries can have many sources of income, such as commissions from the products they sell you, kickbacks from the mutual funds they recommend, or other fees they receive.

 

Check those credentials

How long has the advisor been in business? What experience do they have? How many clients is their firm bringing in? Is it right for my goals and risk tolerance? Ensure you get answers to these questions.

 

Search for clarity

You should be able to review their website, social media profiles, and credentials with a simple Google search. Reading should not be an afterthought but an essential part of your due diligence.

 

Look for fee-only advisors

Make sure the advisor is fee-only. If they are charged a percentage of your portfolio, they may be biased towards keeping that high even if it means going into riskier investments that you don’t need.

 

Understand how the advisor gets paid

Is their compensation tied to the amount of money you have invested with them? Are they paid in cash, stocks, or other non-monetary assets? Find out what counts and doesn’t count as a commission.

 

Find an advisor who keeps you on track

This is where it becomes essential to ask questions. You want to know if your advisor has a track record for keeping investors on track and developing a feasible strategy for their future needs.

 

Conclusion

It is crucial to take the time to do your research and learn what type of advisor will help you reach your financial goals. Think about how much time you want to spend with this person, what kind of relationship you want with them, and what type of questions you want to be answered before you meet them.