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How to Select the Best Investment Advisor?

Brian Carrozzi October 29, 2013

Meeting with multiple investment advisors is a time consuming enough task as it is but then trying to select the best one from all the meetings you’ve had can be an even greater challenge. What makes it even harder is the fact the so many investment advisors go through the same kinds of training and education. That means that many of them use the same tools and strategies because they are all schooled in the same manner. At the end of the day, selecting the right investment advisor for yourself comes down to how well you really know yourself and your goals. If you have a very good idea of what you’re working towards and your personality, it becomes much easier to select the best investment advisor to fit your needs.

Find an Advisor Who Understands Your Needs

One of the keys to finding the best fit lies in communication style. You need to find an investment advisor that you can understand and works well with your personality. If you don’t understand much of what they’re explaining to you, chances are you also won’t understand them when they’re managing your money either. If they explain things in a way that you understand you’ve won half the battle. There is no right way to communicate but one advisor may work for someone but not another. We all communicate differently and have different levels of understanding. Make sure you line up with your advisor here.

Aim for Expertise

The other key to finding the best investment advisor comes down to expertise. Depending on your age, your investment strategy might involve a higher percentage of stocks or bonds in your portfolio. You may also want someone who can advise in other specialty areas like precious metals, real estate or life insurance. It’s important to understand your needs and ask the advisors that you meet with what their strengths are. If you want to focus on precious metals, real estate and bonds, an advisor that is more experience in stocks and currencies wouldn’t be a good fit for you. By knowing your goals and investment objectives, you can make this part easy.

Find a Credentialed Advisor

There are other important factors too, like having credentials such as a CFA or ChFC. These are accreditations that financial advisor get after rigorous training and testing. It makes sense to find an advisor with one or both of these credentials. Some advisors have two or three certifications. It doesn’t make them that much better by having more than one but it is wise to make sure they have at least one.

Be Patient and Ask Questions

Selecting the best investment advisor can be a scary task. Many people are afraid when it comes to talking about investing and personal finance because it makes them uncomfortable. It’s not that hard to understand but people are still intimidated by it and also the process of meeting with financial professionals. By knowing yourself and your goals, you can ease much of the anxiety. Then it comes down to asking good pointed questions when you interview your prospects. Their answers will make the selection for you.

Disclaimer: Please seek professional advice regarding tax liability and investing options based on your personal situation.

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