O is for an Ounce of Caution when Choosing a Financial Advisor

O is for an Ounce of Caution when Choosing a Financial Advisor

an ounce of caution when hiring a financial advisors


Many of us seeking a financial expert may not go about it effectively; this may cause a lack of desired services and results.  It is easy to get lost in the search especially when you don’t know exactly what to look for. You should use an ounce of caution and avoid some common mistakes. The following guidelines can help ensure that you choose a financial advisor that is right for you.

Step 1: Choose an advisor — You shop around for cars, homes, etc., why wouldn’t you shop around for the person who will be managing the future of your income? Ask around and then interview several advisors before choosing one, after all you will be in a long-term relationship, so make sure your views and personalities are congruent.

Step 2: Ask — How much training, certification and education does you advisor have? Seventy percent of financial advisors stop short of completing education licensure and the “required” continuing education credits. So for your own sake “ask”.

Step 3: Fees — Know what you are paying for and how much bang you are getting for your hard-earned buck. Determine what reasonable services, fees and compensations, are fair and equitable for services rendered. If traditional investments are all you seek, you shouldn’t be paying high fees for little work, but you also want to know your advisor is working to put you in the most appropriate investment situation.

Step 4: Beware the alphabet soup — From CIM, to CFA, to TEP and even RHU, there’s a dizzying array of letters signifying credentials for financial professionals. But some experts say the two types that most consumers should look for are either CFP® or RFP. Those stand for Certified Financial Planner™ and registered financial planner. The latter is generally for more advanced investors. A good financial planner’s role is to guide your savings and investment strategy, not sell you individual products.

Step 5: Educate — Yourself regarding credentials. The list of credentials can be overwhelming and it’s easy to be sold on a lot of letters. There is the CIM, TEP, RHU, CFP® and RFP, which basically signify financial professionals. The latter two, CFP® and RFP, stand for both the financial professional and a registered financial planner. Know what you are searching for and make sure you get it. To find a CFP® in your community go to www.cfp.net/search

What truly seems most important when seeking a financial advisor is, “how well do I know this person and what is this person willing to do to assist me as I move forward into my financial future?”  An ounce of caution could mean the difference between greater satisfaction and costly confusion. Your financial advisor should be someone with whom you are comfortable, believe is competent and is exactly what meets your financial needs.

Answers from AZ

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.




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