Financial Adviser 101

Here are some things to consider to protect yourself when picking a financial advisor:

1. The advisor’s background: start with http://www.finra.org, http://www.adviserinfo.sec.gov/, www.cfp.net, and www.fpanet.org.

2. References from other clients: remember to rely more on references with similar investing goals.
3. The advisor’s payment method: this could help you tell if the advisor is pushing something out of self-interest.
4. Checks and balances: is your investment going straight to the advisor or to a thrid-party custodian?
5. The advisor’s track record: ask about specific situations and the combination of all clients the advisor handles
6. Get it in writing: whatever the agreement, spell it out!
7. Check with other professionals: what other professionals think about your advisor can be helpful.

See Shelly Banjo, Seven Questions to Ask When Picking a Financial Advisor, April 13, 2009.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.