22 May

Questions to Ask Before Hiring a Financial Advisor


A financial advisor gives financial advice or guidance and can have multiple specialties, from investment and wealth management to income tax preparation, retirement, and estate planning. While you may want to tackle your finances on your own, getting professional help can have its benefits. A financial advisor provides hands-on financial assistance, planning, and expertise, essential to achieving your financial goals, whether it’s related to your personal or business finances. There are a few fundamental questions that you need to ask before hiring a financial advisor.

How Do You Get Paid?

Clients should know about all sources of income or any commissions an advisor gets as a result of the products they recommend. You need to know if an advisor charges a percentage of the assets they manage, or by the hour, on retainer, or on a project basis, but also important is knowing the value you’ll get in return and knowing beforehand exactly how you are going to be charged.

Will You Sign a Legally Binding Fiduciary Contract?

In essence, your advisor is agreeing to act in your best interest when recommending financial or investment products, with the exclusive purpose of providing benefits to you. Under the U.S Department of Labor rule, retirement advisors are legally required to act under a fiduciary standard of care if they advise on retirement accounts such as IRAs. If your advisor is acting under a “suitability standard,” you need to be aware that advisors have a certain level of leeway in making recommendations and it also allows for conflicts of interest.

What are your experience, education, and credentials in financial advising?

Hiring a financial advisor who is qualified to do the job of advising and managing your money is very important. Advanced degrees in business and finance and years of experience in the areas of investment, trading, or professional certifications, such as the CFP (Certified Financial Planner) or the PFS (Personal Financial Specialist) are some of the qualifications that you should look for in an advisor. An advisor with little or no previous experience is one that you should stay clear of.

What is Your Track Record?

When in doubt or to satisfy curiosity, ask a prospective advisor for a copy of the Form ADV, which discloses information about an investment adviser, business operations, as well as disciplinary events involving the adviser resulting from conflicts of interest, for example. It’s also a good idea to get a client list of references and call to hear firsthand the kind of advisor you are looking to do business with.

Andrew Kyriacou can help you to choose the right financial advisor that understands you and your business goals and will work to help you achieve success.

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