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Tuesday, July 15, 2008

Choosing a Financial Adviser

From The Hoss's Mouth

Your financial adviser must fit you as perfectly as a horse shoe fits a horse's hoof. This is essential if you are to win the race for financial freedom.

Your choice of a financial adviser depends on your financial knowledge and investment experience:

Do you need help with your family's financial matters - i.e. retirement planning, setting goals and paying less taxes?

Do you have investment experience? If not, you will want an financial adviser to provide you with assistance in selecting the proper investment product for your needs. If you are an experienced investor, choose an adviser who offers a wide selection of investments and discusses the benefits and shortcomings of each.

financial advisor

The Hoss strongly recommends that you choose a financial adviser who is registered with a securities regulator. This provides you with added protection, as only properly qualified firms and individuals can obtain registration.

In order to come up with a list of potential candidates, The Hoss suggests you speak with co-workers, family, friends or any other person you trust for their recommendations.

In addition, you can locate registered financial advisers from a variety of sources:

  • banks
  • investment firms
  • brokerage firms
  • online

You might want to make initial contact by phone. This can save a lot of time by eliminating those financial advisers who are not accepting new clients or are not suited to your basic needs.

Once you have come up with a short list, arrange to meet with each one of them in their office. You wouldn't expect a horse to run a race without a warm-up, nor should you approach an interview of this importance without thorough preparation. Ten questions you should ask your potential financial adviser:

  1. What are your qualifications and education?
  2. Do you have references?
  3. Is your company registered with a securities regulator?
  4. Are you personally registered with a securities regulator?
  5. How long has your company been in business?
  6. How long have you been a financial adviser?
  7. What is your area of expertise?
  8. What type of investment products do you offer?
  9. Will these products help me obtain my goals?
  10. How do you get paid?

Do not hesitate to add your own questions to ask your potential financial adviser. (Sidebar: If you would like to add to this list of questions to ask, fill in the comments form below so The Hoss can include them.)

Do not be surprised, in fact you should expect, questions from the potential candidate. S/he should ask you what your goals are, what your investment experience is, and what your risk tolerance is. If these questions are not asked of you, gallop, don't trot, to the next candidate.

While in their office, check out the surroundings, as this will give you some indication as to how they conduct business. Also, take note of how well the financial adviser listens to and responds to your questions. Did you feel completely at ease discussing your financial situation with him/her? If not, again gallop, don't trot to the next candidate.

When you have completed all your interviews, and before making a final selection, contact the securities regulator in your area and confirm the potential candidate and his/her firm are registered and have no record of any disciplinary action.

That's enough for today. This post is more like a route race than a sprint, but it is an important topic.

Stay on track,

The Hoss

Previous Post: Beginner Investing

Next Hoss Cents Money Magazine Post: Working with Your Financial Adviser


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The Hoss is not a financial adviser. This blog is a reflection of his personal opinion, experience and financial choices. For financial assistance, please consult a licensed financial services professional.

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