You Wouldn't Let Dr. Nick Do Your Heart Surgery
If you have ever spent time watching the Simpsons, you know
about Dr. Nick http://en.wikipedia.org/wiki/Dr._Nick_Riviera. Would you let him do your heart surgery? If you wouldn't make Dr. Nick your family
doctor, why would you hire someone of questionable competence and conscience to
be your financial advisor?
Taking proper care of your financial health is just as
important as taking care of your physical health. Just like your physical health requires a
good medical care, your financial health requires the care and assistance of a
good, qualified financial advisor.
The relationship with your doctor is very intimate and must
have a level of comfort and trust in order to benefit you and help you reach
your health goals. Your relationship
with your financial advisor must also be very open and trusting. So the big question is, how do you go about
finding the right financial advisor for you?
Here are six very basic questions you need to ask and have
properly answered before you choose an advisor:
1. What is your experience and
qualifications?
Do they
have the knowledge and background to be able to competently advise you? Ifthey are
new in the industry, who can they call on to get help?
2. What type of clients do you have and
how many?
Does the
advisor have experience working with people in situations similar to you (seniors,
self employed, young marrieds, etc) Do
they have a sufficient client base tohave the
knowledge? Do they have too many clients
to properly service them?
3. How do you get paid?
Are they
fee for service or do they get paid by commission? Fee for service may chargethousands
of dollars for a plan, while commissions are paid by the companies that thebusiness
(insurance and/or investments are placed with)
4. What companies do you work with?
Is the
advisor tied to one company where they can only offer that companies products
andservices? If they say they are independent or a broker,
how many companies do theywork with
and actually have contracts with?
5. What products and services do you
offer?
Are they
focused on only one area (investments or insurance)? Do they give referrals toother
qualified professionals (mortgage broker, general insurance broker, estate
lawyer,etc)? Do they offer educational services (classes,
seminars, etc)?
6. Can you give me five references that I
may call?
Make sure
you contact them and ask how their experience with the advisor has been.
Finally, the biggest factor, after having your questions
answered, is how do you feel about this person?
Are you comfortable with them? If
you aren't comfortable with them you won't trust them with the information they
need to do their job properly. Always
listen to your gut, it is never wrong.
"People differ not only in their ability to do but also in
their 'will to do'."
Paul Hersey
