Finding the Right Financial Advisor

Not only do you want to work with an independent fiduciary, who is legally required to uphold your best interests, you also want to find an advisor who will encourage you to be an empowered participant in financial planning. Here are some questions to keep in mind as you seek the right advisor:

  • Why is my advisor recommending these investments to me?

Do you understand the rationale behind the investments and allocation of your portfolio? If not, it’s time to have this conversation with your advisor, ASAP. It is very important that you develop a strategy that works for you and create an Investment Policy Statement that puts this strategy in writing. The Investment Policy Statement is a great tool to help keep you on track to make smart, savvy investment decisions, as it forces you to articulate your financial goals and outline a strategy – no more reacting emotionally to market noise! Another benefit is that you and your advisor will be on the same page regarding your financial plan. Finance can seem as if it comes with a language all its own, and outlining a clear plan will help ensure that nothing gets lost in translation between you and your advisor.

Which brings me to the next important question:

  • How will I know that I’m making progress towards my goals?

When creating your plan and deciding how you’ll approach your financial goals, this is a good time to ask your advisor what kind of metrics you’ll use to measure your progress. Ask about the benchmarks that will be used to analyze your portfolio’s performance. This discussion should be straightforward and transparent – if you’re confused, don’t shy away from asking for clarification! If your advisor can’t explain in clearly in a way that makes sense to you, that is a red flag.