Seven Mistakes to Avoid When Choosing a Financial Advisor

Seven Mistakes to Avoid When Choosing A Financial Advisor | Staying Financially Healthy | Reverse Your Thinking® Portrait of rich famous successful confident smiling professional attractive business lady sitting at the desktop in contemporary office
Seven Mistakes to Avoid When Choosing A Financial Advisor | Staying Financially Healthy | Reverse Your Thinking®

Choices abound in life, as we all know. Life-altering consequences can result from certain decisions but not others. If we’re being honest, there are occasions when we make the wrong decision because we don’t know better. We should seek advice when it comes to our financial well-being. A financial advisor is a big decision; here are seven mistakes to avoid when choosing a financial planner.

Choosing a non-fiduciary advisor:

A fiduciary is defined as someone who is ethically obligated to serve in the best interests of another person. This responsibility removes the possibility of a conflict of interest and makes an advisor’s counsel more reliable.

Regarding reverse mortgages, Mathius Marc Gertz takes a fiduciary approach. When it comes to investing advice, your advisor should do the same.

Hiring the First Advisor You Meet:

While hiring the first advisor you meet or the advisor nearest to your home listed in the yellow pages may be tempting, this decision takes more time. Seek advice from other reputable specialists, such as SayWhyNot, Inc. Take the time to interview multiple advisers before deciding the best fit for you.

Selecting an advisor with the wrong specialty:

Before signing on the dotted line, be sure you recognize an advisor’s strengths and weaknesses. Some financial advisors specialize in retirement planning, while others are best suited to business owners and people with a high net worth. Some may be appropriate for young professionals considering a family.

Selecting an advisor with an unsuitable strategy:

Each advisor utilizes a unique strategy. Some advisors may recommend riskier investments, while others are more conservative. If you like to invest solely in stocks, an adviser who favors bonds and index funds is not a good fit for you.

Not inquiring about credentials: Financial advisors must pass a test before providing investment advice. Financial advisers must pass the Series 7, Series 66, and Series 65 exams. Some counselors go the extra mile and become Certified Financial Planners CFPs. Inquire about your advisor’s licenses, examinations, and qualifications.

Not knowing how advisors are compensated:

Some advisors are fee-only and charge a set cost regardless of the outcome. Others will charge you a percentage of the funds under their management. Mutual funds pay commissions to some advisors, which may create a conflict of interest. You should consider other options if the advisor makes more money by neglecting your best interests.

Attempting to find an advisor on your own:

Many highly qualified advisors are often in your neighborhood or close to your zip code. However, selecting one might be difficult. One approach is to get advice from other trusted advisors in your life, such as your attorney, CPA, or mortgage specialist. Several online tools available currently may help you narrow down your options., for example, can act as a central location for advisors and associated information. Another great resource, if you are in California, would be the Professional Fiduciary Association of California (PFAC)

You are welcome to contact our office whenever you need financial guidance, assistance, or referrals to other trusted, vetted professionals. We look forward to the opportunity to serve you.

Originally posted February 7, 2019

Leave a Reply