6 Steps to Selecting an Investment Advisor

Since no two people have the same economic situation, it is crucial to pick an investment advisor that can meet your unique needs. The financial sector is vast and includes multiple services, from budgeting to trust management. In general, advisors will specialize in one or several of these areas. Therefore, it is beneficial to follow these six actions when selecting an investment advisor.

1. Establish Why You Need Advisory Services

Before you investigate different investment advisors, determine why you want their assistance. Reflecting on the type of service you desire will narrow down your options and make it easier to find an advisor with the knowledge and skills necessary to help you navigate your circumstances.

2. Verify the Advisor Is a Fiduciary

Put simply, fiduciary duty means the financial advisor puts the needs of the client before their own. The trouble is the term has become so widely used in the industry that it is a smart idea to do your research on the investment advisor you are considering. As a result, you need to ensure the investment advisor abides by this claim.

A good example of a financial advisor who takes their fiduciary duty seriously is one receiving no commissions for their services. This feature enables the organization to offer guidance that best supports the client because the advisor’s compensation is not dependent upon which financial product the client chooses. If an advisor is financially incentivized to recommend certain options over others, it tends to create a conflict of interest for them when that option may not be what is best for their client.

3. Complete a Background Check

Once you find an investment advisor you like, research their background to learn more about their ethics and credentials. Issues like fraud can be a red flag, but if you want a chance to give them the benefit of the doubt, you can ask the advisor what happened.

4. Schedule a Meeting with the Advisor

Besides background checks, you can also set up a meeting with possible investment advisors. You can ask questions about their typical client, how they usually communicate with their customers, and their processes for making recommendations with wealth management. Your financial assets are important, so having these discussions is essential to making the best choice.

5. Learn How the Advisor Earns Their Pay

People can obtain financial advice from many professionals, including brokers, insurance agents, and Registered Investment Advisors (RIAs). Depending on the specific specialist, you may end up with someone who is effectively a salesperson for a financial company peddling products or services.

One strategy for avoiding these advisors is to select a fee-only organization. Fee-only investment advisors are those who receive payment exclusively from their clients. In other words, they earn no compensation from companies for selling products and services.

6. Ensure They Value Your Needs

Even if an investment advisor has all the financial knowledge and aptitude available, they still need to take a human-centered approach to their work. Your advisor should practice active listening and empathy when speaking with you to show they care about your unique needs. Additionally, they should encourage you to make better decisions with your money and reassure you during difficult personal or national financial situations.

Obtain Trustworthy Guidance from Moneta

If you have had trouble selecting an investment advisor, look no further than the independent, fee-only RIA, Moneta. As a firm, we provide personalized service while maintaining the advanced security and longevity of a larger financial institution. We also have no hidden commissions or incentives that influence advisory services.

Contact us to learn more about how we help clients across the United States navigate their financial needs.

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. Registration as an investment advisor does not imply a certain level of skill or training. These materials were prepared for informational purposes only based on materials deemed reliable, but the accuracy of which has not been verified. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. You cannot invest directly in an index. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.

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