News For This Month: Professionals

March 18, 2019


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How to Find the Right Investment Advisor for You

So you’ve decided you want to hire an investment advisor, but you still don’t know which particular type is suitable for you. Now all that’s left is the challenging part – looking for an advisor who is both knowledgeable and sincere in keeping your best interests at heart. But again, financial advisors come in a variety of types. How can you tell which one is the best fit for you? You can start by considering the volume and kinds of services you need.


If your needs are very basic, you may benefit from working with a brokerage firm, which is usually paid with reasonable commissions. But take note that brokers are only required to practice what is known as a suitability standard of care, meaning they can only sell or suggest investment types that are right for the client and their financial goals. This does not cover a legal requirement to recommend the best or most cost-efficient types of investments. This is just one of the many reasons it’s important to research the background of a financial advisor before deciding to hire them.

Certified Financial Planners (CFP)

Certified Financial Planners (CFP) are finance professionals who have passed all the requirements of the Certified Financial Planner Board of Standards, which includes passing a comprehensive board exam and having minimum experience. In addition, CFPs need to pass continuing education requirements to keep their CFP status. CFPs have professional knowledge in several areas of financial planning, from insurance to taxes to estate planning and more.

Registered Investment Advisor (RIA)

If you need investment advice and regular financial planning services, hire a Registered Investment Adviser. These professionals are only paid by you as their client, and the only investments they recommend are those that are particularly suited to your needs, whether these are no-load mutual funds, low-cost index funds, and so on.

They are also required to follow a fiduciary standard of care, which is more complex than the suitability standard of a broker. Thus, an RIA is legally required to prioritize the client’s interest above their own. As expected, there will be ongoing fees but these fees will be paid by you, and a good RIA can cut on costs low-cost mutual funds, which are usually the best-performing funds.

Insurance Agents and Bankers

While insurance agents and bankers are not technically investment advisors nor financial planners, the industry allows them to sell stocks, bonds, mutual funds, and certain other investment products. Also, they can serve as financial planning consultants.

Finally, whomever you decide to hire as an advisor or planner, it is best to pick one with certification. You should also ask for referrals from friends, colleagues or anyone you trust, or at least scan some client reviews online before hiring someone.

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