by Jack Waymire
Finding financial advisors can be easy. Finding a top quality financial advisor is much more difficult. 39.5% of investors find financial advisors through referrals. Their family, friends and associates have made recommendations based on the past results they have experienced.
Increasing numbers of investors (25.3%; up from 16.2%) use the Internet to find financial advisors for two reasons. (1) They can find advisors on the Internet and (2) They can learn more about them without actually contacting them. There is no contact until you are convinced the advisors are competent, ethical professionals. Meanwhile, you are anonymous until you are ready to be contacted by the advisors that you selected.
Wall Street Headlines
Years ago 62% of investors selected advisors from brand name, Wall Street firms because they felt safer. Headline after headline that documented one abuse after another has eroded that false sense of security. It is now down to 16.3%. Who you trust with your assets is no longer as simple as selecting an advisor just because you recognize the name of the advisor’s employer. In modern times, you have to dig deeper to make the right decision.
Top 5 List for Selecting the Best Financial Advisors
Regardless of how you find advisors you should be looking for five characteristics that will help you determine their quality.
(1) They are Registered Investment Advisors or Investment Advisor Representatives. These registrations permit them to provide advice and ongoing services for fees.
(2) They have credentials that establish them as experts: College degrees, quality certifications, and years of experience.
(3) You should select advisors who are compensated with fees and not commissions.
(4) Limit your selection to advisors who are financial fiduciaries. They are required to put your financial interests ahead of their own. They are held to the highest ethical standards in the financial service industry.
(5) They have clean compliance records.
Please comment and tell us which methods you have used to select a financial advisor?
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