Most people would never consider installing a new transmission in their car by themselves. They don’t have the time or skills, so they hire a mechanic for peace of mind. Many of today’s investors take the same approach to investing and get expert advice from an experienced financial adviser.
The 77 million Americans who are preparing to enter retirement want to ensure their savings won’t run out. The average investor, however, doesn’t understand market fluctuations or complex financial products. Studies show that those who seek the advice of a financial adviser are more confident about their financial futures-but how do you find the right person for the job?
Step 1-Identify your needs. Whether you need assistance with retirement planning or saving for your children’s education, you should define your financial objectives before you begin your search for an adviser.
Step 2-Ask friends, family and co-workers to make recommendations. Your financial adviser should be someone you trust-you’re putting your hard-earned money in their hands.
Step 3-Interview at least three advisers before making the final selection.
During the interview process, there are many factors to consider. Look for an adviser who has extensive experience in multiple areas, including investments, insurance and retirement planning. You will also want to inquire about the adviser’s licensing-he or she should have a Series 6 or 7 registration in good standing. You can check an adviser’s record by contacting the National Association of Securities Dealers (NASD) at (800) 289-9999.
Once you’ve confirmed that the adviser has a good track record, it’s time to delve deeper into his or her personality. A good adviser will consider all aspects of your financial situation and design a customized plan to help you achieve your goals. He or she will provide the same level of service to all clients, regardless of how much they invest. It’s also critical that your adviser’s “investment philosophy” is consistent with your own. For example, an adviser who favors risky strategies is not a good match for a conservative investor.