The right financial direction can lead you to a lifelong financial success.
When it comes to hiring a financial advisors, it should be as important as Credit: wikipediachoosing your own personal doctor. As we all work our lives to earn money to provide for ourselves and family, it should be equally as important for us to learn how to not work as hard for it, and have it virtually working for us. The world is becoming more financially educated as time goes on, however most people only learn that saving is the best for them. As saving money is a great strategy to have money longer, it is a way to also limiting the full potential of that money being saved. In the following I will discuss five top rules when it comes to choosing and hiring a financial advisor. I hope you find this article informative and something you can use to help make your future brighter.
Step #1 Asking Friends and Family for referrals.
Following this first step thoroughly can make a good determination on whether any future investments could prosper in a positive way. When most people want to invest, they are unsure where to start. The best way is to start is asking your friends and family. You would be amazed on who around you is investing. Even further, is questioning what types of investing people are doing. I won’t get into the different types of investing that are available, but what I will say is that there are plenty of types. The reason why you should ask your friends and family is because they will tell you the truth on who is doing a good job. They will also tell you who you should stay away from.
Step #2 Interview Your Potential Financial Advisor
I bet your are thinking to yourself and saying...DUH! Of course! But do you realize how many people forget Credit: wikipediathis part? Let me ask you a question, are you working for them, or are they working for you??? Well, its funny how we get that mixed up especially when its our own money that we are playing with. On a serious note, treat this like you are running a business and you want to hire and employee. Would you hire the first candidate that had education but no experience? Seriously, this happens in many corporate companies, but this isn't your company. The answer would be NO! ABSOLUTELY NO! So when you meet up with this financial advisor, make it known that you are in charge! Its your future, not theirs that should be important. Hopefully you can employ this person for as long as you can, because having a financial advisor that works, you hold on to them and never let go.
Step #3 Check the background of the Financial Advisor
Ok, now you are probably thinking... What? Seriously? Well let me ask you, if this is your business, wouldn't you do a background check and drug test? Well this is probably one of the most important things to do IF NOT THE MOST important.Credit: Wikipedia
Money is a very serious factor, so take this whole process seriously. As you conduct your meeting with the advisor, ask some preliminary questions and write them down to cross check the accuracy of the information. The best way for someone to verify the background of a potential financial advisor is to contact some some organizations I will mention.
- NASDR - National Association of Securities Dealers - This is the top resource for finding your financial advisor background. Website: www.nasdr.com
- NASAA - North American Securities Administration Association - This organization is solely in support of helping investing protection. The NASAA helps protect investors from securities fraud. Website: www.nasaa.org
- CFP - Certified Financial Planner Board of Standards - This is the organization that enforces the standards that all financial planners must follow. Website: www.cfp-board.org
As you go through this stage, I believe that you will feel way more comfortable with your potential advisor. This will also give you a leg up on what extent of information you do know so they can't take advantage in the future.
Step #4 Keep in constant contact with your Financial Advisor
Now this is very important to the fact that keeping up to date of the efforts of your financial advisor. Once again, thinking of this as your business (which it basically is), you want to know how efficient your "employee" is doing. Not to belittle your financial advisor, but he/she does works for you!
ChCredit: Wikipediaecking in on your financial advisor could also help in building a better long-term relationship. Relationship is what everyone should have when they are keeping a long-term advisor. Also, as you build your knowledge, you can also lend other directions to the advisor on where you would like to go. Just like a doctor, they don’t know everything; the doctor looks to you to tell them how you are feeling, the indications that you are having, etc. The doctor can then make a diagnosis of the issue and work from there. With a financial advisor, if something changes financially in your life and you feel it could benefit to invest differently, than inform the advisor! Sounds silly, but we all get complacent and think everyone knows what is going on telepathically. But the truth of the matter is unless you inform the financial advisor; otherwise, he or she will never know what you want. Sit down with them, or make a phone call periodically and talk to them.
Step #5 Be in control of Your Money!
If there is anything you walk away from this article is to remember that you are in control of your money. Regardless of how the financial advisor wants to say it, or sell you on an idea; You need to do your due diligence on the decision. Its your money that you are handing over to the financial advisor. Make a plan of what you want, write it down, and give yourself a timeframe. The idea is creating a goal and acting upon it. Regardless of what age you are, you can still have a good financial future if you plan. Talk constantly with your financial advisor, develop a plan, conduct reseach of what plan will give you a potential return on investment (R.O.I.); also understanding the amount of risk you are willing to endure. Remember to have fun, be involved, and the rewards will follow.