Americans seeking a financial adviser need to spend time researching their options and looking into the background of advisers they are considering before entering an advisory relationship. Prospects are not making as much of an effort as they should to look into an advisers qualifications and reputation, because they don’t know how to start. There are always going to be a few bad eggs posing as financial advisers out there, just like any other profession. As a financial adviser, you can help prospects avoid the pitfalls of a bad adviser while demonstrating your trustworthiness and ability to deliver important advice.
Get Rich Slowly, a wonderful personal finance blog, features an article “How to avoid hiring a shady financial adviser.” This post details seven ways to research an advisers qualifications and background, which can be completed about 30 minutes. The seven tips are included below, with a link to the recommended tools.
( 1 ) “Understand the adviser’s credentials”
Use Investor Watchdog’s Check a Credential page
( 2 ) “Check your adviser’s credentials”
For a CFP® use the CFP Board’s Find a CFP Professional
( 3 ) “Preform a FINRA Broker check”
Use the Financial Industry Regulatory Authority’s FINRA Broker Check
( 4 ) “Perform SEC and NASAA searches”
Use the Securities and Exchange Commission’s broker search and the North American Securities Administrators Association.
( 5 ) “Ask individuals you trust”
Use your personal network
( 6 ) “Check out the web and read social media profiles”
Use Google, Facebook, Linked In, Twitter
( 7 ) “Ask the adviser this critical question… do you have a fiduciary duty to me?”
Use a face-to-face meeting with the adviser to ask this question
Thank you to Get Rich Slowly for providing this helpful information. I encourage all financial advisers to pass this information along to prospects. You will be doing them a great service by help them avoid the bad, and land on the good (hey that’s you!)