10 Tips for Finding the Ideal Financial Counselor
You’re starting to prepare for the future, thinking about building up that savings account for any number of reasons–putting a down payment on a home, saving for college for your children, saving for retirement. It’s wise to consider employing the assistance of a financial counselor–someone who manages money for a living can often provide incredibly valuable insight and recommendations for how to grow your money.
Here, we provide tips on finding the ideal financial counselor for you.
Determine your goals.
Different financial counselors specialize in different things. Some, for example, focus solely on retirement. So make a specific list of your financial goals, and look for a counselor whose focus is on serving individuals who have similar goals to your own.
Talk to your friends.
Referrals are always best. Talk to your friends about whom they have engaged as a financial counselor, and about the approach the counselor takes. What kind of guidance was generally given to your friends? Has the counselor helped your friends make money? Have they lost money under the guidance of the counselor? If so, why?
Saving for your dream home? Finding the right financial counselor can help you get there faster.
Look for online reviews.
Search online for reviews on financial counselors local to you. If anyone has lost someone money, you can bet there will be reviews about that! This can help you steer clear of the bad counselors. Yelp.com is a great place to start, as is Angie’s List.
Fit matters.
Find someone whom you respect and trust, and with whom you can be frank about your spending habits, goals, and dreams. Financial health is nearly as important as physical health in life, and you wouldn’t trust your physical health to just any doctor. For this reason, it’s important to have a real connection with your financial counselor. Don’t just settle for anyone in this case. Fit is important.
Ask your parents or someone older for whom asset management is even more important.
People who are in later stages of their lives typically will have done more research on the subject of financial management than your peer group may have. That’s because they are far closer to (or in) retirement, and need to be extremely careful to make the money that they do have last as long as possible. Ask your parents or a trusted family friend who is in good financial health whom they rely upon for financial advice.
Make sure your financial counselor is overseen by FINRA or the SEC.
FINRA is the Financial Industry Regulatory Authority and SEC stands for the Securities and Exchange Commission. This is an important step as you want to be sure your advisor is credible.
Find out if any complaints have been lodged against the counselor you select.
Check out BrokerCheck on the FINRA website to verify whether any complaints have been made about your counselor of choice. Read any complaints carefully, and if you decide to move forward with a counselor, do not be afraid to ask questions about those complaints to determine why they were made and what changes have been made since to prevent future such complaints.
Don’t let fancy performance charts woo you.
A recent SmartMoney article indicates not to be wowed by performance charts, as “Fancy charts and presentations (that) play up an investment’s performance should be understood for the market or time period. The investment may actually have under-performed, but still makes for a good chart!” So be sure to ask a lot of questions about any data your candidate puts forth that makes his or her performance look positive. Data can be spun in many ways.
Compare and contrast.
Don’t simply consider one candidate to manage your money. Just as you would compare pricing and style of a car or a camera before committing to it, do the same with your future financial counselor. Bringing a financial counselor on board is time-consuming, and you don’t want to have to switch after making your decision. So ask detailed questions and interview more than one financial counselor for the sake of comparison. Conduct the interviews as closely to one another as possible so details from both are fresh in your mind and you can make a decision more readily.
Don’t be afraid to switch!
All of the above said, if you’ve selected a counselor and it is just not working, switch! This is your financial health and well-being we are talking about, and if you find that your counselor is giving advice that is irresponsible or ill-informed, get out and get out fast. Follow the aforementioned advice again and try to find a better fit. Sometimes life requires a bit of trial and error.
Finding the right financial counselor can mean the difference between living extremely comfortably throughout your life and into retirement, and living very uncomfortably. So be sure to choose wisely–be patient in the process, and do your research. You will be glad you did down the road!
Life’s road is long- find a financial counselor whom you can trust to guide you.
Cara Aley is a freelance writer who covers a wide variety of topics from online reputation management for Reputation.com to health and wellness.
Image Credit: Shutterstock.com
Category: Money Basics
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