How To Evaluate and Choose A Financial Professional

First and foremost, we believe a good Investment Professional provides is a clear and measurable definition of success. With that, we believe in an advice based approach, which not every Investment professional is licensed to provide. If your Investment Professional is licensed to provide financial advice, your they should write an investment plan or policy statement tailored to your specific situation, needs, and goals. This statement should cover the following objectives and constraints: target returns, risk tolerance, time horizon, anticipated withdrawals or contributions, tax constraints, and regulatory issues, if any. Success varies by individual, so it is imperative that you have a definition for yourself. If a financial advisor cannot help you define and, equally important, regularly track the success of your portfolio toward your desired goals, you may have a reason to be concerned.

Second, we believe a good Financial Advisor communicates clearly and promptly. Many investment strategies can employ vocabulary, including jargon specific to the industry, that aren’t easily grasped by lay persons. Your financial advisor needs to explain their strategies and investment products carefully and patiently in easily understood language. This may also include a detailed description of the Financial Advisor’s personal philosophy that guides his or her approach. Some Investment Professionals don’t have a formal approach to investment management; instead they focus on the sales of a variety of investment or insurance products that may fit a client’s individual need.

In addition, we want you to feel that you are getting personal service that includes prompt responses to your questions or requests, including a face to face conversation at least once a year. We don’t feel you shouldn’t be forced merely to navigate a website where you put in a request for a call back by someone other than your Financial Advisor or Investment Professional or are communicating via an internet chat line.

Third, ethical Investment Professionals make clear how much you are paying for their services. Some blogs will tell you to make sure you know how your Investment Professional is compensated and will advocate a fee only approach over a commission-based approach or vice versa. Just as important as how much you’re paying or how it’s being paid is what you’re receiving for your money. For example, I believe that paying 2% for a solid plan with benchmarks and tracking is better than paying 1% for investment management without a solid plan. I believe it is also better to pay 2% for a 9% return than to pay 1% for a 5% return.

Investment Professional’s compensation is relevant mainly as it pertains to your goals and their achievement. Investment Professionals should be willing to be completely transparent with regard to their compensation. After all, we believe your relationship should be based on mutual trust and openness, making transparency about compensation paramount.