Things to consider when hiring a financial advisor.

There are many things to consider when thinking of hiring a financial advisor. Quality of the advisor should be the first thing determined by the consumer. Determining quality means research – without skimping and with verifying the information.

There are three ways an advisor charges for their services. By commission only, an hourly rate, or a mix of the two. While commission only sounds great, be aware that they may feel pressured to generate sales, regardless of financial goals. Remember, a good financial advisor is there to teach not just sell.

There are many ways to find financial advisors. Keep the rule of three in mind when selecting an advisor. Yes, it does mean three times the research, but it is better to do the extra digging to make sure the right person is selected. Regardless of the selection process, always check their background and references. Here again contact at least three references to find out their experiences with the advisor.

When talking to current clients find out the approach the advisor has taken to helping each client. It shouldn’t be the same for everyone, as everyone’s needs are different. If current clients didn’t get a financial plan in writing or don’t get performance statements, this could be a red flag. Carefully weigh the answers received from the current clients as it is, in essence, the report card for the advisor.

When the shortlist of advisors has been determined, start interviewing the advisors. And it is definitely an interview process. Find out why they feel they are good at what they do, and their passion for their work. Have them describe their preferred client as well as services offered. It is also good to know how long they have been doing this type of work. Get full disclosure from them – it should match up with previous research.

Finding out how many clients they already serve can be important to incoming clients. Make sure they will be able to serve all clients, not just a select few. Don’t hire them because they seem like they would be a good friend. They need to be an advisor first, and if they become friends later, that can be a bonus.

Come to the meeting prepared. Usually an advisor will be in contact so the correct documents and information can be brought to the first meeting. Preparation is key for potential clients as well as advisors.

There are, without a doubt, many things to consider when hiring financial advisors. Just as each client is different, so is each advisor. Weigh all the pros and cons before deciding which avenue is best. The extra work now pays off in the long run.