When I’m working with a client or in my seminar, I offer my “Working With Your Financial Advisor” Checklist. The feedback has been that it has only enriched their relationships or helps enlighten them to move to one better suited to their situation. A new study came out that investors pick their advisors based on the advisor’s skill and personality (Oechsli Institute). Apparently the firm does not matter as much.
The next question is how well do your personalities match? I have so many clients that have a contentious relationship, are scared to call or don’t want to waste their advisor’s time. Does your advisor know your 6-month, 5 year and retirement goals? The investments they pick should match these goals accordingly so this is very important! Do not forget that you are the client and it is your money.
If you have an advisor that manages your money or sells you investments, it can’t hurt to do a bit of homework on them. Here are some places to do so or questions to ask:
BrokerCheck (www.finra.org/investors). It isn’t perfect and may exclude some essential information (such as pending judgments or customer complaints) but it does have lawsuits and disciplinary history.
Ask for your advisor’s Form ADV, parts I and II.
What are your commissions and how do you get paid? It can be flat-fee based on percentage of assets or commission based or incentives from mutual funds.
Can you explain how to read my statements?
Will I be able to speak with someone regularly? You want to make sure you are not getting less preferential treatment than other clients who may have more money.
This new fund you are suggesting I invest in, how long have you been selling it? You want them to answer more than 3 weeks and at least one year.
Is there a less expensive way to pay for your help?
Are there any good funds you are not allowed to sell me?