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Hiring a Financial Professional: 6 Keys to Success


Hiring a Financial Professional: 6 Keys to Success

In today’s world, hiring a financial professional can be overwhelming. There is a exhaustive list of titles for financial professionals such as financial advisor, financial planner, wealth manager, investment advisor, estate planner, tax planner and accountant. And while each title mentioned above may conjure up a different business model in your head, the fact is that the lines between each have gotten more blurred through the years.  The purpose of this article is to help you locate the right financial professional for you, regardless of title.  Consider the following criteria when deciding on a financial professional:

1.  Incentives

What motivates and encourages your financial professional to make the decisions they make?  Ask questions to better understand how and why they chose their occupation.  Make sure you have a firm grasp on their financial incentives.  How are they compensated for their services, products and advice?  There is no one perfect fee structure.  That being said, it is important to know if your interests align with the professional you are looking to hire.

2.  Competency

We live in a day where everyone is a self-proclaimed expert.  However, just because someone says they are an expert doesn’t make it true.  A good place to start is to look at the professional’s educational background and prior work experience.  Another way to know if your professional is competent is to look to see if they hold respected certifications and designations.  Chartered Financial Analyst (CFA) for investment management, Certified Financial Planner (CFP) for financial planning, and Certified Public Accountant (CPA) for tax advice are examples of designations with well respected curriculum and ethical standards.  Finance is a dynamic industry that has constant changes in regulations, laws, and products.  Therefore, its important to ask about continuing education and how they keep up with these professional changes.

3.  Unbiased and Independent

Great benefit can come from financial professionals who have a breadth of service offerings and an unbiased voice.  In many cases, large firms have their own product suite.  Because of this, employees can be pushed to use their own products at the expense of finding the best solution for the client.  Large firms may also have quotas and shareholders to answer to, which may take precedence over your best interests.  Being independent and having no products to sell puts a financial professional in a position to make decisions that are in the best interests of his/her clients.  Ask your financial professional what range of services they provide and if they have compensation arrangements that motivate them to sell one product over another.

4.  Philosophy

Make sure your professional’s firm’s philosophy matches that of your personal philosophy.  You should be able to get a sense of this by reading their website, visiting their office, and asking them directly.  It is also crucial that a firm’s investment philosophy be consistent with your goals and objectives.

5.  Trust

While hiring a financial professional, the goal is to establish a long-term relationship.  One key to ensuring a lasting relationship is your ability to trust the individual or firm.  Ask questions that will give you meaningful insight into the firm you are considering:  Will your money be placed with a well known and financially stable firm?  Do the professionals use the products/services they are recommending?  How do they fulfill their fiduciary responsibilities?

6.  Do Your Homework

To truly understand how each financial professional addresses the criteria mentioned above will require a thorough and sometimes lengthy discovery process.   In addition, seek input from friends and existing clients of the firms you are considering.  Make sure you interview a number of professionals before making a final decision. Do your homework and inquire until you can take comfort in your decision.

Written by

Andrew Molnar, CFA®

Andrew is a creative, out of the box thinker with a good eye for detail. In addition to being a member of the Investment Committee, Andrew works on trading, building client relationships, and heads the New Business Development Committee. He is focused on continued education as he successfully completed the Chartered Financial Analyst (CFA) Program and is a Chartered Financial Analyst charter-holder.  He is also an avid reader of all things business, economics, and human behavior.

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