Orlando Wealth Management And Financial Advisor Information
www.premiereorlandowealthmanagement.com
www.premiereorlandowealthmanagement.com
How to pick the best Financial Advisor or Wealth Manager for YOU!!!
During great economic times, it was easy to hire a financial adviser and let your money grow. Now the market is in chaos and thousands of investors have been devastated by fraud, or worse, incompetence.
The first step is to realize that you're responsible for your own investments. Picking the right advisor is the first step in your quest to financial freedom.
Here are the 7 Biggest Questions you need answered before picking your Financial Advisor.
1. What's in the adviser's background?
You can find regulatory records for stockbrokers, investment advisers, insurance agents and their firms online, starting at Finra.org, the Financial Industry Regulatory Agency's Web site. Finra's BrokerCheck will tell you which states and regulatory organizations that brokers and their firms are registered with, along with licenses they hold, exams they've passed, and their employment history. The site also lists any investigations, disciplinary actions, disputes, or criminal chargest.
For investment advisers with more than $25 million (they are regulated by the SEC), go to http://adviserinfo.sec.gov and click on "Investment Adviser Search".
Other websites are Certified Financial Planner Board of Standards Inc. (www.cfp.net) and the Financial Planning Association (www.fpanet.org).
2. What do the adviser's clients say?
Don't wholly depend on the reputation of a big firm or recommendations from friends, family or members of your country club.
It can be helpful to ask for references from past and current clients in life situations similar to yours. When talking to the clients, get specific about their experiences. How often did the adviser communicate with them? Has the adviser ever admitted to making a mistake? How often do they evaluate their goals with the adviser? Has anything about their relationship surprised or disappointed them? Has the adviser performed well in bull and bear markets? Is the adviser ethical?
3. How does the adviser get paid?
Knowing how advisers get paid will help you tell if they're working in your best interest. They may get a commission on the securities they sell; charge fees, either flat or a percentage of the assets they manage for you; work at an hourly rate; or a combination of all of them. Ask advisers to detail exactly how they work and the total compensation picture from managing your portfolio.
Also ask about conflicts of interest. For example, if advisers work on commission, ask for their firm's commission schedule and find out if there are a limited number of products or services they can recommend and why. If they can't justify the limited choice, that's a red flag. Meanwhile, if advisers take a percentage of assets as a fee, remember that they may be inclined to advise you to avoid moves that may reduce those assets, including charitable giving or buying a new house. Also be wary of an adviser who charges more than 1% or 2% of assets.
4. Where are the adviser's checks and balances?
When purchasing investments, make sure you are writing checks to a third-party custodian, like Fidelity Investments Co. or Charles Schwab & Co., not to your financial adviser directly.
Call the independent institution to verify it's serving your adviser, and never send checks anywhere but that firm's business address. What's more, don't allow your transaction confirmations and account statements to be mailed to anyone but you. You should receive account statements from the third-party custodian.
Likewise, find out what auditors your adviser's firm uses. Auditors are crucial, since they verify the existence of the assets your adviser manages.
It's also important to ask how the advisers conduct due diligence on any money managers they recommend investing with. Do they check out the managers' balance sheets, and how their actions line up with their investment strategies? Do the advisers have a personal relationship with the managers or get kickbacks from referring you?
5. What's the adviser's track record?
Advisers sometimes say they can't easily describe their track record, since they tailor each portfolio to an individual client's needs. But that excuse doesn't hold up.
Good questions are: How many clients beat their benchmarks or are in line with their goals? How have clients similar to me fared during recessions? Remember to ask about both short-term and long-term records, and ask if your adviser is using absolute returns or returns relative to the market.
Next, use the advisers' record to understand how they make decisions. Ask the advisers to dissect a specific situation that has occurred to them; both best case and worst case scenarios. Finally, be watchful for any adviser claiming to always beat benchmarks.
6. Can the adviser put it in writing?
Ask for a formal written outline of the services the adviser will be providing and what fees you will be paying. By setting concrete expectations, you can determine if an adviser is going to do exactly what was agreed upon, or not.
For instance, you can ask advisers to spell out investment strategies, specific benchmarks and suggested financial products. Secrets usually mean red flags.
Also ask advisers to spell out who else stands to gain from your relationship, as well as exactly how much the adviser, the adviser's firm and all those other parties will earn from your business.
Finally, find out whether the advisers are going to take on fiduciary responsibility, in which they are legally bound to act in your best interest.
7. What do other pros think?
It's imperative that you double-check any (big) moves. That means knowing the basics behind your investments, insurance, estate planning and taxes, and then turning to other experts for confirmation. For instance, if your financial adviser recommends investing in commodities, read up on recent news affecting the commodities markets and then search out an expert and ask questions.
*Some of the information used in this article was taken from the Wall Street Journal
www.premiereorlandowealthmanagement.com
Brent Levin
Levin.brent@gmail.com
by: BLevin
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