MikeLigalig.com

Qualified advisor? Or glorified salesperson? If you’re considering seeking the assistance of a financial professional, you need to know the difference.


What does a financial advisor do?

Well, that depends on the advisor. A good advisor should help you make asset allocation decisions, diversify, find balance … in other words, “advise” you. While an advisor may offer constructive investment suggestions based on an overview of your current financial situation and future goals, you should not expect an advisor to prophesize on market movements or magically pick stock “winners”.

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A financial advisor has to put my interests first … right?

Not necessarily. You may find that some financial advisors are really only familiar with certain investment products they are encouraged to sell. In fact, by law, their only requirement is not to sell you a product that is wholly inappropriate. They have no legal obligation to act in your best interest. To clarify – if your financial advisor were a car salesman, he couldn’t legally sell you a car he knew was inoperable. But he’d be totally free and clear to sell you a vehicle that, while operational, he knew was not truly the best fit for your needs.

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Ask for and read a potential advisor’s code of ethics.

I’m not saying this will be an enjoyable task, but it may be very worthwhile. You should be clear on exactly what code of ethics your potential advisor must abide by. Look specifically for language regarding acting in the best interest of clients.

Specific needs? Look for someone who specializes.

Keeping track of everything for everyone is difficult no matter what the field. Focusing and specializing in a particular area allows some advisors to become very well-versed and experienced in the needs of certain clients. Their aim is to excel at one thing, rather than be merely “okay” at everything. For example, some specialize in the needs of educators, others in the particular requirements of medical professionals, while still others may focus on a specific demographic or net worth. Consider seeking out a professional whose specialty matches your needs.

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Research designations.

There are many certifications and “professional designations” out there (you may see a bunch of two-, three-, or four-letter initials after your potential advisor’s name), but what do they mean? Find out! Some require a great deal of education and training, while others may require only a few hours of webcasts to achieve.

For more information on designations, visit the FINRA website’s professional designations tool at http://apps.finra.org/DataDirectory/1/prodesignations.aspx
 
Your Financial Professional may have a significant impact on your future. You owe it to yourself to spend some time finding some one you feel you can trust. -- http://www.montoyaregistry.com/




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