By Brian Hepp Market Matters
MOST PEOPLE ARE WILLING TO GIVE YOU their two cents on what to do with your money.
Advice is easy to find, but good advice may be harder to come by.
As an investor, it’s easy to focus on the performance of your investments. But to achieve your investment goals, it’s important to find a financial advisor who understands your lifestyle, goals, financial needs, risk level and personality.
Here are a few points to keep in mind when selecting a financial advisor: DOES YOUR FINANCIAL ADVISOR LISTEN?
It’s important that your financial advisor really listen to you and asks a lot of questions. She should ask you to describe your investment goals and then help you develop different investment strategies according to those goals.
For example, whether you are starting a retirement fund or saving for a college education, there are different investment options that may work better in each situation.
DOES YOUR ADVISOR ANSWER QUESTIONS?
It’s vital to ensure that all your questions are answered by your financial advisor. Make sure her explanations are made in non-technical terms. Feel free to ask her to translate any terminology that you aren’t quite sure about.
Does your financial advisor keep you updated on your various accounts?
You should receive regular statements showing you the activity in your accounts and information about new investments appropriate to your financial situation.
In addition, your financial advisor should sit down with you regularly and review your financial situation.
Is your financial advisor looking out for new investment opportunities?
You need a financial advisor who will be flexible and have fresh ideas on how to adapt your portfolio to your changing needs. You want to be able to rely on her to call you with a new idea that could have the potential of improving your rate of return from your investments while matching your tolerance for risk and the time period in which you have to invest.
DO YOU GET ALONG WITH YOUR ADVISOR?
Do you and your financial advisor feel comfortable around each other? Do your personalities blend well or do they clash? These are important questions to answer. It’s great to have an advisor who you can chat with and who feels like a trusted friend while still being able to be objective when it comes to serving your financial needs.
You also want to make sure that your financial advisor understands your personality and the types of risks you are willing — and not willing — to take with your investments. A relationship based on open communication is vital to the success of your investment portfolio.
CAN YOU TRUST YOUR ADVISOR?
Trust is hard to define. But one of the best ways to help ensure that your financial advisor has your best interests at heart is to make sure she listens to you, asks and answers questions and communicates effectively and often.
Remember, when it comes to your money it’s important to work with someone you trust, and you can always switch advisors if you don’t feel you have a good match.
BRIAN HEPP is a financial consultant for A.G. Edwards & Sons, Inc. He (310) 453-0077 or at
Originally published in the Santa Monica Daily Press print edition on April 23, 2008. Read the original PDF.