Selecting a financial advisor is one of the most important decisions you will make. I encourage you to follow the five P’s in selecting an advisor for your investment goals.
Preparation – As with most important decisions in life, preparation is the key to your success in choosing an advisor. Develop specific questions related to your goals. Ask for referrals from friends who have been successful in achieving their investment goals. Research the background of the advisors before you make your final selection.
Professionalism – Your advisor will have access to personal details of your finances, so trust is very important. Most advisors will have an introductory meeting with you at no cost. Such meetings provide you with the opportunity to decide how comfortable you will be, both personally and professionally.
Philosophy – Asking questions about an advisor’s investment philosophy is important. Are they conservative or aggressive? Will the advisor be able to respond to your views? The size of an investment organization is not necessarily an indication of an advisor’s ability to help you. How often will you receive reports? Will you be able to understand these reports?
Performance – Analyzing performance results is another important aspect. How is the advisor paid for his or her performance? Are they commission-based or fee-based. Determine whether an advisor’s performance data includes the impact of fees charged to clients and whether he or she receives compensation from anyone other than clients.
Professional Designation – Financial professionals may hold one or more designations that represent their competence in specific areas. For example, some analysts hold the prestigious Chartered Financial Consultant (ChFC) designation. Ask how such designations are administered, including any educational, ethical or work experience requirements that must be met in order to hold the designation.
For a more information call Tim Shaner, president of Capital Consultants at 661-259-1644, visit www.capitalconsultants.org or drop me an email at tjshaner@aol.com .