Tips for hiring a good financial advisor
There are various reasons why you may need a financial advisor. From helping you with your investments, letting you know about the market status, and managing your financial portfolio, a good financial advisor lets you rest easy on money matters. But it is very important that you choose a financial advisor that suits for your requirements so that they understand you and your goals as an individual to suitably guide you. A professional opinion is extremely useful when looking at long term planning and even something pretty distant like retirement. In case you have decided to hire a financial advisor it is important that you shop around and find the one that suits your needs adequately as well as charges reasonable fees.

What educational qualification and experience should you look for?

• Review the educational background and experience of your prospective advisor and try to find out why that particular individual may be uniquely positioned to help you with your financial state of affairs.
• Specifically, seek such advisors who have proven they could actually apply their knowledge to develop the most effective strategy for you.
• An advisor’s website and articles might be an excellent starting point to find out about their qualifications, planning practice, and thought process.
• You can get precise information on independent advisors registered with their states or the U.S. Securities and exchange commission (SEC), as well as advisors related to a brokerage firm, at broker check, a free tool from FINRA.

How to evaluate an advisor’s credentials and certifications?

• Unfortunately, there is no particular certificate that one can look at to verify a potential advisor’s credentials.
• The Financial Industry Regulatory Authority (FINRA) warns that anybody can call him or herself a financial analyst, monetary advisor, financial planner, financial representative, investment consultant or wealth manager.
• In reality, an individual could be a drop out of high school, rent some office space, pass a FINRA general securities exam and be selling stocks – all within a couple of weeks.
• While exams such as the series 6, 7 and 63 fulfill the industry regulatory requirements, they do not provide the advisor experience with regards to real-life situations.
• The finance industry is likewise rife with professional designations, many of which can be obtained with very little to no efforts.
• However, there are three leading certifications which are significant and are ethically required for a financial advisor. These are Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC).
• If you need any help regarding retirement prospects, then you must look for a person who has specialized in Chartered Retirement Planning Counselor (CRPC), and taken complete training in financial planning for retirement through the college.

How to look for a financial advisor you can trust?

• Even though most of the big retail brokerages provide financial planning services, be cautious with their employees.
• While many of them are well educated and can be trusted, others may simply be glorified stockbrokers employed by large wirehouses to sell proprietary mutual finances and stocks.
• If you are really looking for someone who will help you in your financial planning it will be wise to hire a registered investment advisor (RIA) or Investment Advisor Representative (IAR).

How should the fees or commissions be decided?

• In fee-based structure, the payment can be done hourly, projectwise, a retainer or a flat on-going amount which can be derived from the percentage of the assets managed, generally, the greater the assets, the lower the percentage.
• In the commission-based structure, the advisor charges a commission each time a transaction takes place or a financial product is purchased.
• Many investors prefer the modern fee-only approach as compared to the traditional commission set up.
• There may be a combination of payment methods.
• You must ensure that the rates, fee structure, and commission schedules are clearly laid out in writing before signing on to work with the advisor.

How will you find an advisor?

• FANA: It is is an excellent place for finding advisors through the National Association of Personal Financial Advisors (www.napfa.org). It is the country’s leading organization for the finding of fee-only advisors.
• CFP website : This website helps in locating a CFP near you.
• Referrals : You can ask your CPA, attorney or another expert you trust, for a recommendation.