Putting your money into investments can be a smarter choice than just letting it sit in a savings account, and having an experienced advisor by your side can help you succeed even more. Whether you’re new to investing or have been at it for a while, a reliable advisor can boost your results. Here are some tips to help you choose the right advisor.
**EDUCATION AND EXPERIENCE:**
Think about how you wouldn’t trust your health to someone without the right medical training; the same goes for your money. Make sure any advisor you’re considering has the right qualifications and experience. You can do this by checking their website and looking at independent reviews to see their background and how long they’ve been in the field.
**PROPER LICENSING:**
Once you feel good about their education and experience, check if they’re properly licensed. Investment advisors should pass the Series 65 exam to qualify as Registered Investment Advisors. While additional certifications aren’t required, they can add to an advisor’s credibility and give you more confidence. Look out for certifications like Personal Financial Specialist, Certified Financial Planner, Chartered Financial Consultant, and Chartered Financial Analyst.
**FEES:**
Understanding how an advisor gets paid is crucial before you commit. They should be clear about their fee structure, as this can reveal any potential conflicts of interest, especially if they earn commissions. Common fee types include a percentage of assets under management, hourly fees, and flat fees. Also, ask about any extra costs not covered in the base fee to avoid surprises.
**OPT FOR A FIDUCIARY:**
Choosing fiduciary advisors can be beneficial because they are required to put your needs first. While non-fiduciary advisors can give good advice, it might not always be in your best interest.
**RUN A CRIMINAL BACKGROUND CHECK:**
It’s important to do background checks on potential advisors. Although you can ask them directly about any criminal history, an official check will give you more certainty. Background checks can also reveal any regulatory issues they’ve faced. Asking for references from current clients can also help boost your confidence.
**DEGREE OF INTERACTION:**
Deciding how often you want to interact with your advisor is also key. Some people prefer an annual check-in, while others want more frequent updates. Share your investment goals with potential advisors to set up a meeting schedule that works for both of you. It’s also a good idea to set an agenda for each meeting.