What is a Good Financial Advisor?

What is a Good Financial Advisor?

A good financial advisor should care as much about your investments as you do, and be personable and knowledgeable enough to make the relationship worth your time, money, and trust.

Choosing a Financial Advisor is a bit like choosing a caretaker for your child: you would want someone who gives you a sense of security, who has professional references or the recommendation of a trusted friend, years of experience, is reliable and honest, can foster growth, and ideally, will care about your child almost as much as you do.

However, there are so many financial advisors and so many different financial degrees, that the task may seem nearly impossible. Ideally your financial advisor would fit your personality and investment style or situation.

It would be wise to do your research online and via recommendations from friends. When sifting through the results of your search it can be helpful to know what the professional designations mean and which ones signify the strongest qualifications.

The most prestigious financial designations include CFA (Chartered Financial Analyst), CFP (Certified Financial Planner), and PFS (Personal Financial Specialist), while other combinations of lesser designations could also indicate that an advisor is educated and experienced, but his or her professional affiliates, company, and recommendations must be satisfactory to you.

It’s also noteworthy that the compensation structures for these are different and may affect the kind of advice you are given, unfortunately. Are the services fee-only, fee-based, or commission only? A good advisor will act in your best interest and will not hesitate to refer you out to another trustworthy advisor when a particular issue is not their strong suite.

A good advisor is also going to listen more than he or she talks and is going to ask you a lot of questions to understand fully what the situation of your finances, your family, and your business are, what your goals are for the future, and what your preferences are when dealing with money and investments.

The positive or negative experiences of investors often result from communication with the advisor, or lack thereof, and whether or not they are being heard, understood, and informed. Be willing to “interview” a few advisors to get a better of idea of where you would feel the most comfortable placing your business.

There are many good financial advisors out there, but which one is good for you?

Where do I find a Financial Advisor?
Where Do I Find a Good CPA?