Choosing a financial advisor/broker

Ok. Some of you may have saved up a sum of money, won the lottery, or inherited a nice sum from a relative, and you ask yourself, "Now what do I do?"

Well, it's not as simple as you think and with anything to do with money, knowledge is always going to be power.

If you aren't knowledgeable enough about investments to pick your own, you will have to find a financial advisor/planner/broker (all mean and do the same exact thing). Or alternatively you can start an online savings account Don't worry, there are many people in your shoes.

I would recommend to interview three different brokers (one independent broker and two who work for firms) and ask them why you should let them manage your money. Do some research about the firms including any complaints and also google the advisors names to make sure they are legit.

Here are a list of questions to ask, in addition to the one in the previous paragraph:

1.) What kind of services will you provide me with that makes you unique from other brokers?

2.) What is the smallest (asset size) client you will except?

3.) What types of clients do you mainly deal with (estate planning, retirement, college savings, etc.)

4.) (after he recommends a strategy) How much do you make off of what we are doing today?

Most of you information will be had when he gives you his spiel. If he spends more time talking about his products and what they can do for you than asking questions about your life, run. If he recommends one product for all of your money, run. This means he is looking to make the most money and doesn't have your best interests in mind.

If, however he asks a lot of questions about you and provides you with investments that have low fees, are diversified, don't have a lot of rules or stipulations attached to them, you may have found a suitable person.

Always remember that a good advisor looks out for the interests of his clients first and usually the investment strategy that pays him the most will not be the most beneficial to the customer. Check out Tradeking Promo for more information on transferring your account to another broker who could save you more money.

In my next post I will give you a layout for smart investments strategies, which may help in your search for your next advisor.

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