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Finding a good, long-term investment advisor is not easy. But before you start, understand your own needs – how much you plan to save and invest, and what you need for future expenses (tuition, down payments, retirement, etc.) Then look for advisors who can set you on a long-term path to enjoying your wealth today while saving and investing for tomorrow.
Start by short-listing qualified advisors - Certified Financial Planners and Registered Investment Advisors are a good place to start. Focus on local advisors so you can meet them face-to-face. Check your advisor’s credentials using SEC, FINRA, NASAA and CFP Board websites.
Quiz your advisors on investing experience, long-term performance and how they overcame portfolio performance blunders. Ask for copies of certifications and licenses. Ask for, and call, references similar to your profile. Clearly understand advisory fees, use the Internet to compare rates, drive for discounts but accommodate higher fees tied to performance. And make sure you clearly understand performance benchmarks.
To avoid fraud, make sure your advisor does not have a financial interest in the company that handles your account (your insurance against a Bernie Madoff style rip-off). Ideally, choose someone who owns a home close-by and has been in it for years. Pick someone you can clearly communicate with, like and trust, but remember, your advisor’s professional capabilities are more important than his social skills – you’re looking for a wealth manager, not a best friend or social contact.
Once you’ve picked someone, the test continues. Over the years, see how your advisor matches-up to his promises. Keep an eagle eye on your portfolio’s performance and on fees, commissions and expenses. If you’re lucky, you’ll end up with a good long-term advisor. If not, don’t get emotional but cut to the chase and start your search all over again.