Wondering if it is time to fire your financial advisor? Here are four things to consider.
It isn’t uncommon for someone who begins working with a financial advisor to believe he or she is working in their best interest, and that financial advisors have similar ethical obligations as investment advisor representatives or attorneys. Unfortunately, this isn’t always the case. Investment advisor representatives and lawyers fall under the category of fiduciaries, but not all financial professionals do, therefore they are not held to the top legal standards in terms of their client’s financial interests. Even with the Department of Labor’s new fiduciary definition in effect since June of this year, not every financial advisor will act as a fiduciary.
Because of this, it is up to you to do your research and find a financial advisor who is trustworthy and will put your financial interests above his or her own. This entails knowing the right questions to ask and red flags to keep an eye out for. It also means recognizing whether or not your current financial advisor is working in your best interest. To help you determine if you are working with the right financial planner, here are 4 tips to consider:
1. Possessing adequate credentials
When working with a financial advisor, you have every right to ask him or her about education and certifications obtained. Degrees and certifications highlight that this person has studied finance and passed exams to prove their skills. Here are some of the most common financial designations you might come across:
ChFC – Chartered Financial Consultant
CFA – Chartered Financial Analyst
CPA – Certified Public Accountant
CIC – Chartered Investment Counselor
CIMA – Certified Investment Management Analyst
PFS – Personal Financial Specialist
CFP – Certified Financial Planner
2. The ability to listen
A good financial advisor is going to want to help you succeed in your short and long term financial goals. The best way to make this happen is when an advisor has solid listening skills and will take the time to understand your lifestyle, income level, risk tolerance, and needs. While an advisor may be as intelligent as they come regarding financial matters, this will not serve you well if he or she doesn’t take an active role in listening and understanding your desires.
3. Complete transparency
Do you understand how your financial planner is being paid, and why he or she is making certain financial recommendations to you? There are numerous ways for a financial advisor to make money, and he or she should be upfront about this process from the beginning. In addition, be sure you find an advisor who is transparent regarding why certain investment vehicles are being suggested. If an advisor gets paid a commission on selling particular investment vehicles, you may get a suggestion on an investment that isn’t in your best interest. This is why it is crucial to interview and research any potential financial advisor.
4. Aggressive and Unrealistic
Do you have a financial advisor who aggressively tries to sell you on an investment product or promises to elevate you to millionaire status quickly? If so, it is time to start searching for another advisor. Find someone who will tell you the truth about different investment products, the good and the bad. And, keep in mind, when a financial advisor has your best interest in mind, he or she won’t try to push specific products on you.
To learn other financial planning advice and additional tips on when it may be time to fire your advisor, visit www.SummitBrokerage.com. Summit Brokerage Services has been voted the #1 boutique independent broker dealer in the country. Let us show you why! To experience the Summit difference, learn more about our network of independent financial advisors, and begin creating your financial planning documents, visit https://www.summitbrokerage.com or call us at (800) 354-5528.
About Summit Brokerage Services, Inc.
Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.
About Cetera Financial Group
Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions. Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.
Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations. Independent financial advisor support resources offered through Cetera include award-winning wealth management and financial planning and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology. For more information, visit www.ceterafinancialgroup.com.
*”Cetera Financial Group” refers to the network of retail independent broker-dealers encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, and Summit Brokerage Services.
All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy.
Content created by Summit Brokerage Services, Inc.