How Do you Choose an Investment Professional?

Brent Pittman —  02/10/2011 — 8 Comments

Can you find a financial advisor you can trust?

Investing for retirement is important, but do you need a broker to do that? How can you find someone you can trust? So how do you choose someone to help you invest your money? Should you do it yourself or should you pay someone to help you?  How is that person paid?   By commission or by flat fee?  Are they a Fiduciary or a salesperson?  These are all important questions to find out, so let’s dive in.

You could invest for yourself through many companies now, but not all mutual funds and investment vehicles are going to be available to you.  The advantage of investing online are the low fees, but you are going to be on your own for investing advice and what funds and mixture of funds to choose from.

If you want a professional to assist you (I use a professional for the majority of our investing), then you want someone who has the heart of a teacher. You want a person who will advise you and not talk down to you condescendingly to you if you don’t understand some financial term.

If you are a couple, then BOTH of you need to feel comfortable with the person or firm.  If your wife has an odd feeling about that guy, then just choose another.  We went through 3 before we found one we both agreed on. Never invest in a financial product that you don’t understand.

So how do you find someone?  You can ask your friends for referrals or you go through referral systems. We used our local investing ELP from Dave Ramsey. *We now use an online provider for investing [Why I switched Mutual Fund Families].  You could look for CFP or CFA’s. If you are looking for a fee only adviser/broker then look here. You should ask how they get paid, by commissions or fee?  Are those fees negotiable? Do you have to have a minimum $ amount to start investing with them? We started from scratch and our broker didn’t require any minimums.  Ours does get a commission, but the percent decreases as our amount increases.

Something else when interviewing your investing professional is to look them and their firm up on IAPD and FINRA BrokerCheck to see their qualifications (Series 7 or 63) and history of filings and complaints with the Securities Exchange Commission (SEC).

Hope this helps and enjoy the process!

(Photo by thinkpanama)

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.