Choosing a Financial Advisor

Let a professional help with both short-term and long-term goals

GETTING FINANCIAL advice from a professional literally pays off. AMA Insurance’s 2016 Report on U.S. Physicians’ Financial Preparedness showed that 67% of physicians who use a professional financial advisor say they are ahead in their financial goals. But how do you find a reputable financial advisor quickly and easily? Here are six tips.

• Know the different kinds of financial professionals. Financial advisors provide advice to help you best enhance your wealth while investment managers help you handle your investments and securities so you’ll have a strong investment portfolio.

• Choose a payment type. Commission-based advisors receive commissions on the financial products they sell. Fee-based advisors provide advice for a fee but also get paid commissions. Fee-only advisors get paid through flat fees, hourly rates or a percentage of the assets they manage.

• Choose a financial advisor who is a fiduciary. Fiduciary duty is the legal and ethical obligation to act solely in your best interest. Fiduciaries must put your best interests before their own,
act in good faith and provide all relevant facts to clients, avoid conflicts of interest and disclose any potential conflicts of interest, do their best to ensure that their advice is accurate and thorough and avoid using a client’s assets to benefit themselves.

• Determine how much help you need. If you only have a specific question, such as how best to pay back student loans, then an advisor who provides hourly consultation might be your best bet. If you want someone to create a one-time roadmap to help you reach your goals, find an advisor who charges an hourly rate or a flat fee for the project. But if you want comprehensive asset management find an advisor who can invest and manage your money, providing continuous management through all of life’s stages.

• Look at credentials. Look for the ones that take a significant amount of time to master such as a Certified Financial Planner (CFP) or Registered Investment Advisor (RIA) or Chartered Financial Analyst (CFA).

• Ask your colleagues. Find out who they use but be sure to do your research.