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Identify the Appropriate Financial Advisor For You

By Brian Famigletti, Managing Director & Head of Marketing

Put Your Money to Work

You’ve worked hard for your money. It’s high time it worked for you. The most effective way to ensure your wealth grows consistently is to hire a professional money manager. But how do you pick the right one?

10 Do’s and Don’ts

Here are 10 do’s and don’ts that can help you decide how to identify the appropriate financial manager for you.

  1. Comparative shop. Select at least three advisors to interview and compare offerings to find the right match for your unique circumstances and needs.
  1. Trust but verify. Advisors must be either state or federally registered and any indiscretions on their part must be publicly disclosed. You can check out advisors’ records online by referencing the SEC’s advisor information page.
  1. Track record matters. A money manager will ideally have at least a 10-year history of returns. Check out how they’ve done in terms of risk-adjusted performance and relative to an appropriate benchmark like the S&P 500.
  1. Consider the basis of their advice. Guidance on investment strategy should not be one-size-fits-all, but reflect your unique goals, risk tolerance, and time horizon.
  1. Don’t be a face in the crowd. Ask how many clients the advisor serves. An advisor with 200 clients will have much less time for you than one with 50.
  1. Don’t be below average. Find out what the advisor’s average account size is. If you have less money to invest, you’re likely to be a lower priority client.
  1. Don’t be a lost connection. Determine how often the advisor will check in with you. If it’s less than quarterly, you may not be getting the guidance you need.
  1. Monitor the progress. Confirm you will receive reports illustrating your portfolio values and performance at least quarterly.
  1. Read the fine print. Know what it will cost you to have your portfolio professionally managed. Ideally, you will be assessed one flat, competitive fee, without additional fees for wire transfers or commissions.
  1. Listen to your gut. Does the advisor seem trustworthy? You will be disclosing a lot of personal information to your advisor, and it’s important you trust the person stewarding your money.

Why It’s Worth It

Studies show working with an advisor can substantially improve your investor experience. Advisors can add value by structuring a customized investment portfolio that reflects your goals, timeline, and risk tolerance. They also provide invaluable behavioral coaching to help navigate choppy periods in the market.

Ultimately, you want to hire an experienced advisor with a clean record who will look out for your best interests and whose claims are backed by results. Due diligence up front can improve the odds that, in the end, your needs will be addressed, and your expectations met.

Looking for a financial advisor who will put your needs first? Consider the wealth management team at Griffin Asset Management.