By: Darlynn Morgan, Business Attorney in Newport Beach
It’s a new year – time to get the financial house in order.
But with all the bad news about crooked investment counselors and dishonest financial planners, you may be more than a little hesitant to trust someone with your life savings.
If you want to hire a professional to handle your portfolio, you need to do what folks in the legal trade call “due diligence”.
You need to do your homework and interview the planners you’re considering.
When choosing a financial planner, ask them the following questions to get a good feel for not only their level of expertise, but their ethics as well.
Question No. 1: How many years of financial planning experience do you have?
They should have at least five years of experience. If you have a sizable portfolio, you want someone with considerably more experience. Don’t let someone “learn the ropes” with your money.
Question No. 2: What level of education do you have?
Any financial advisor should have at least a Bachelors degree. The more advanced the education, the better. Find out where they went to school and check the school out to make sure it’s an accredited university. You don’t want to hire someone to handle your money who bought their degree. Of course, if it’s Harvard, Yale, Stanford or some other well known university, you can skip this step. Just make sure that it’s a valid degree.
Question No. 3: Do you have any additional professional certifications?
The correct answer to this is yes, these certifications indicate that your advisor has obtained specialized knowledge in their area of expertise. That’s good news for your portfolio.
Question No. 4: Are you a Registered Investment Advisor or Investment Advisor Representative?
RIA’s and IAR’s provide financial planning services for a fee. Other types of advisors will sell you investment and insurance products and work on commission. You need to know what you are getting and be comfortable with the answer so you can determine what is in your best interest.
Question No. 5: How do you get paid?
There are three typical answers to this question – hourly, asset-based, or fixed fee. If the answer is commissions, you’ll want to dig a little deeper to ensure that there isn’t a conflict of interest, meaning, you want their first thought to be protecting and growing your money, not just making a sale.
There is no time like the present to start planning for your financial future. If you’ve been hesitating in hiring a professional to help you, taking these questions into the interview will make it much easier for you to determine whether or not the planner you’re interviewing is the right one for you. This is your life savings and your future we’re talking about. Take it very seriously and proceed with caution.
Call us to schedule your Family Wealth Planning Session today. As your neighborhood Business Attorney in Newport Beach, I can help you with getting your legal and financial house in order and ensure that you’re getting the best advice possible. Our Family Wealth Planning Session is normally $750, but this month I’ve made space for the next two people who mention this article to have a complete planning session with me at no charge. Call (949) 260-1400 today and mention this article.