Tips To Avoid Conflict With Your Financial Advisor

It is a common misconception that you have to be wealthy to benefit from a financial advisor. People who have more money certainly have a greater need for professional advice, yet everyone at some point in their life can benefit from a good financial advisor. Events such as the death of a loved one, marriage, divorce, estate planning, saving for college and of course investments have the potential to become complex money events in life. Before you enlist the help of a professional financial advisor you should first consider the following tips to avoid regretting your decision in the future.

• Do your own research- The most common reason people regret working with a financial advisor is due to a bad experience. No one likes to lose money and if you have had a negative experience you more than likely want someone to blame. Unfortunately in some cases (not all) the negative experience could be avoided with some research before you work with a financial advisor. Talk to your employer, co-workers, friends and family for references. Once you have a list of possible candidates, research their work history and experience. Know what is is you need from an advisor to find the right match for your needs.

• Know your rights- When you hire a financial advisor to handle investments you as the investor have certain rights. By becoming familiar with your rights (Investor Bill of Rights) you can recognize when these rights have been violated. If you find your financial advisor has not worked within the scope of your rights, then you may have a case against your financial advisor.

• Understand the fee structure- To avoid confusion or conflict in regards to how much your advisor gets paid, make sure you understand the fee structure before doing business together. Financial advisors are generally paid in one of the following three ways: commission, fee based on assets or flat fees.

• When in doubt follow your instincts- Like other things in life, there are times we all get a certain “feeling” or gut instinct about a person or company. If you have doubts and are not 100% comfortable with the information you have learned about your financial advisor, you would be better off taking the time to find an advisor that you feel comfortable handling your financial affairs. Perhaps the financial advisor is not on the up-and-up or you might simply have a clash in personalities…in any event you should always feel confident that your advisor is working for your best interest.

Finding the right financial advisor can make the difference between having a trusted professional who will work on your behalf or paying someone who is not interested in anything more than making money (for themselves). Once you have found the right advisor make sure you keep the lines of communication open. You may be paying them to guide you on the right path, however in the end your affairs are your responsibility.