Interviewing an advisor is a good step to take because the advisor you choose will affect your financial future. Consider interviewing an advisor, or several advisors, before making a final decision. Make appointments for interviewing the advisor.
Make a list of questions to ask when interviewing an advisor. Think about what you are looking for and ask relevant questions when interviewing an advisor. Consider the following questions when interviewing and advisor. Q. How long have you been a financial advisor?
You can discover how much experience an advisor has when interviewing an advisor by asking this question. Many advisors start as stock brokers or assistants for other advisors. The advisor may also work under a mentor at a larger firm. Be sure to ask about work experience when interviewing an advisor.
Q. Are there any disclosures on your criminal, NASD or insurance records?
Problems in an advisor's past are important to discover when interviewing an advisor. When interviewing an advisor, ask if disciplinary actions have ever been taken against him. If yes, ask for an explanation. If the explanation is not satisfactory, discreetly end the interview. Use the NASD broker check to look them up and help you determine questions to ask when interviewing an advisor. (www.nasd.com)
Q: What certifications do you have?
Consider certifications when interviewing an advisor. Advisors should provide proof of competence. Competence is not a midas touch but rather understanding investment goals, objectives, strategies and risk analysis. Some of the more common to look for are CPA/PFS, CFA, CFP. Your advisor should hold one or more of these depending on your needs. Ask about certifications when interviewing an advisor.
Q: Are you a Registered Investment Advisor (RIA) or an Investment Advisor Representative (IAR)?
When interviewing an advisor, ask about these. These advisors take the right test and join the right organizations to give themselves credibility and set themselves apart from the less qualified. Always ask about RIA and IAR status when interviewing an advisor.
Q: How do you get paid?
Compensation is an important consideration in interviewing an advisor. If advisors make money from commissions, they may have a conflict of interest by recommending, for example, an annuity with a 5% commission over a bond with the same return but only a 2% commission. When an advisor charges an hourly or flat fee, they may be more objective about your investments. Make sure you understand how an advisor will be paid when interviewing an advisor.
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